USD/CHF struggles to justify options market optimism below 0.9700

USD/CHF retreats from a 12-day high, snapping a three-day uptrend, as markets consolidate the previous day’s heavy volatility amid the recession fears. That said, the quote eases from the previous day’s multi-day high of 0.9704 to 0.9680 during Wednesday’s Asian session.

In doing so, the Swiss currency (CHF) pair fails to justify the options market’s bullish bias as traders await but the Federal Open Market Committee (FOMC) Minutes and the US ISM Services PMI for June will be important to watch for fresh impulse.

One-month risk reversal (RR) of the USD/CHF rose the most since early May the previous day, to 0.2000 on a daily basis. It’s worth noting that the RR is a spread between the call options and the put options, conveying the difference between bullish and bearish market bets.

That said, the growing fears of global recession joined speculations that China may recall covid-led lockdowns to weigh on the USD/CHF prices on Tuesday. The pessimism intensified after Germany and Italy flashed economic warnings while the Bank of England (BOE) also released a report conveying the grim economic outlook.

Also read: USD/CHF Price Analysis: Retreats from 21-DMA below 0.9700, snaps three-day uptrend