USD/CHF grinds near 0.9600 after six-day uptrend, market sentiment is the key

• USD/CHF seesaws near the highest levels in over a week.
• Risk aversion underpins the US Dollar’s haven demand.
• Coronavirus woes, Fed concerns weigh on the sentiment ahead of important data/events.

USD/CHF treads water around the weekly high near 0.9600, probing bulls after six-day advances, as traders seek fresh clues during Tuesday’s Asian session.

The major currency pair’s latest inaction could also be linked to the cautious mood ahead of Wednesday’s key data/events, as well as recently mixed signals from the US Federal Reserve (Fed) policymakers.

Fresh fears of the Coronavirus outbreak and remembrance of the Covid-led woes marked in early 2020s pushed traders towards the US Dollar in search of risk safety. Also likely to have favored the greenback are the firmer prints of the US Retail Sales and Producer Price Index (PPI) for October which underpinned the hawkish bets on the Fed’s next move.

Even so, Atlanta Federal Reserve President Raphael Bostic and Cleveland Fed President Loretta Mester appeared less hawkish in their latest speeches. That said, downbeat prints of the Chicago Fed National Activity Index for October, to -0.05 compared to 0.17 prior, also challenged the US Dollar bulls.

However, US Dollar Index (DXY) rose the most in November the previous day amid a surge in China’s Coronavirus cases and the first virus-linked deaths in Beijing since May.

Against this backdrop, Wall Street closed in the red and the US Treasury yields were firmer too, which in turn favored the US Dollar buyers and propelled the USD/CHF prices.

That said, a lack of major data/events and the market’s consolidation ahead of the key catalysts, scheduled for release on Wednesday, might challenge the USD/CHF pair buyers amid a likely sluggish Tuesday. It’s worth noting that hawkish comments from the Swiss National Bank (SNB) officials, published in the last week, also challenge the pair buyers of late. Though, the risk catalysts and the mood of traders will be crucial for near-term directions.

Technical analysis

Despite the latest inaction, the USD/CHF pair remains on the way to challenging the 200-DMA hurdle, around 0.9635 by the press time, unless dropping back below the downward-sloping trend line from November 04, close to 0.9400 at the latest.