USD/CHF weakens farther below 0.9900 handle, over 1-week lows post-US data
- A sharp pullback in the US bond yields undermined the USD and exerted some pressure.
- The downside is likely to remain limited amid renewed optimism over US-China trade talks.
- Weaker US Consumer Confidence Index for does little to impress bulls or lend any support.
The USD/CHF pair weakened farther below the 0.9900 handle and dropped to one-week lows during the early North-American session on Tuesday.
The pair extended its recent pullback from three-month tops - around the 0.9985 region - and traded with a mild negative bias for the fourth consecutive session on Tuesday, though lacked any strong follow-through selling.
Improving risk sentiment offset by weaker USD
The intraday downtick seemed unaffected by signs of stability in the global financial markets, which tends to undermine the Swiss Franc's relative safe-haven demand, rather took cues from a modest US Dollar pullback.
Reports that China has allowed some companies to buy millions of tons of US soybeans without import tariffs bolstered hopes of a deal between the world's two largest economies and helped improve the global risk sentiment.
Meanwhile, the greenback failed to preserve its early gains and has now drifted into the negative territory amid a sharp intraday pullback in the US Treasury bond yields, which seemed to be the only factor exerting some pressure.
On the economic data front, the Conference Board's US Consumer Confidence Index came in well below market expectations, at 125.1 for September, and did little to impress the USD bulls or lend any support to the major.
From a technical perspective, the pair is currently placed near the lower end of over one-month-old ascending trend-channel, which should act as a key pivotal point for near-term trajectory and warrant some caution for aggressive traders.
Technical levels to watch