USD/CHF snaps three-day uptrend above parity level ahead of US ISM PMI

• USD/CHF seesaws around one-week high, prints mild losses.
• Mildly bid US stock futures, sluggish Treasury yields probe DXY bulls.
• Hawkish Fed bets, geopolitical/covid fears keep buyers hopeful.

USD/CHF bulls take a breather, following a three-day uptrend, as the quote makes rounds to 1.0010-15 during Tuesday’s Asian session. In doing so, the Swiss currency (CHF) pair seesaws around the highest level in a week while printing mild losses at the latest.

The pair’s recent weakness could be linked to a pause in the US Treasury yields’ run-up after a two-day winning streak. On the same line could be the mild gains of the S&P 500 Futures despite the Wall Street benchmark’s negative closing.

The downbeat US data and hopes of more easing in the oil prices, and inflation in turn, appeared to have exerted downside pressure on the US dollar. That said, the US Chicago Purchasing Managers’ Index and Dallas Fed Manufacturing Business Index for October came in at 45.2 and -19.4 versus 47.0 and -15.0 expected respectively.

“US President Joe Biden on Monday called on oil and gas companies to use their record profits to lower costs for Americans and increase production, or pay a higher tax rate, as he battles high pump prices with elections coming in a week,” said Reuters.

However, the market’s fears of hawkish Fed and cautious mood ahead of the key central bank announcements, as well as the employment data, underpinned the US dollar’s demand.

Looking forward, the USD/CHF traders may seek more clues to extend the latest pullback, which in turn highlights the Swiss SVME Purchasing Managers’ Index for October, expected 56 versus 57.1 prior. Following that, the US ISM Manufacturing PMI, likely to ease to 50.0 versus 50.9 prior, will direct immediate USD/CHF moves. Additionally, The US S&P Global Manufacturing PMI for the stated month, expected to confirm the initial forecast of 49.9 figure, will join the JOLTS Jobs Openings for September, forecast 10M versus 10.053M prior, to also entertain the pair traders.

Technical analysis

An upward-sloping trend line from late Thursday, around 0.9950 by the press time, restricts short-term USD/CHF declines.