USD/CHF consolidates in a range, just below the parity mark
- USD/CHF bulls struggled to make it through the parity mark amid fresh US-China tensions.
- Signs of stability in the financial markets helped regain some positive traction on Friday.
- A subdued USD price action did little to influence and might keep a lid on any strong rally.
The USD/CHF pair regained some positive traction on the last day of the week, with bulls still awaiting a sustained move beyond the parity mark.
The struggled to capitalize on this week's goodish positive move to near two-month tops and witnessed a modest pullback on Thursday amid the prevalent cautious mood, which tends to underpin the Swiss franc's relative safe-haven status.
Upside seems limited amid trade uncertainty
Given that the US President Donald Trump on Wednesday signed two bills supporting Hong Kong’s pro-democracy demonstrators, fresh concerns about deteriorating US-China trade relations weighed on the global risk sentiment.
This coupled with stronger-than-expected Swiss Q3 GDP growth figures exerted some additional pressure on Wednesday, albeit holiday-thinned liquidity conditions held investors from placing aggressive bets and helped limit deeper losses.
Despite the latest development, it is still unclear if it will have any bearing on the US-China "phase one" trade deal. This coupled with some signs of stability in the equity markets seemed to extend some support to the major.
On the other hand, the US dollar was seen consolidating its recent gains to two-week tops, albeit lacked any fresh buying interest and might turn out to be the only factor keeping a lid on the pair's attempted positive move.
Hence, it will be prudent to wait for some strong follow-through buying beyond the 1.00 handle before positioning for a further near-term appreciating move amid absent relevant market moving economic releases from the US.
Technical levels to watch