USDCHF stays firmer past 0.9900 with eyes on SNB’s Jordan, US elections

• USDCHF picks up bids to refresh intraday high, snaps two-day downtrend.
• Risk aversion, sluggish markets underpin USDCHF rebound ahead of the key data/events.
• US CPI, mid-term election outcomes and comments from SNB’s Jordan are the key catalysts to watch for clear directions.

USDCHF prints mild gains around 0.9915 while snapping a two-day downtrend around the lowest level in a week. In doing so, the Swiss Franc (CHF) pair portrays the market’s risk-off mood, as well as the cautious sentiment ahead of a speech from Swiss National Bank (SNB) Governor Thomas Jordan.

A jump in China’s daily coronavirus number, the biggest one since May 01, joins the market’s anxiety amid the US mid-term elections buzz and could be considered the main catalyst behind the recent swing in the mood.

In this regard, Reuters states, “COVID-19 cases sharply escalated in Guangzhou and other major Chinese cities, official data showed on Tuesday, with the global manufacturing hub fighting its worst flare-up ever and testing its ability to avoid a Shanghai-style citywide lockdown.” The news also mentioned that the new locally transmitted infections climbed to 7,475 nationwide on November 7, according to China's health authority, up from 5,496 the day before and the highest since May 1.

That said, an otherwise uninteresting US mid-term election gain the market’s attention as ex-President Donald Trump teased a “very big” announcement coming on November 15. “If Republicans secure a House majority, they plan to use the federal debt ceiling as leverage to demand deep spending cuts. They would also seek to make Trump's 2017 individual tax cuts permanent and protect corporate tax cuts that Democrats have unsuccessfully tried to reverse over the past two years,” said Reuters.

Against this backdrop, the US stock futures print mild losses whereas the US Treasury yields grind higher and the US Dollar Index (DXY) recover from the eight-day low.

Looking forward, a mention of the recently firmer Swiss inflation numbers and the SNB’s readiness for more rate increases could probe USDCHF buyers. However, the risk-off mood may help the pair remain firmer ahead of the US Consumer Price Index (CPI) for October, up for publishing on Thursday.

Technical analysis

USDCHF buyers remain hopeful unless the quote provides a daily closing below the 0.9880-70 support confluence, including the 50-day EMA and an upward-sloping support line from September 30.