USD/CHF bulls defend 0.9900 ahead of SNB’s Quarterly Bulletin, speech from Fed’s Powell

• USD/CHF seesaws around daily tops after snapping four-day uptrend.
• Sour sentiment joins firmer US data, hawkish Fedspeak to propel US dollar but CHF’s safe-haven appeal tests buyers.
• Bears need SNB’s signals for further rate hikes to defend the latest entry, bulls can cheer Powell’s hawkish remarks.

USD/CHF changes hands around 0.9920, after reversing the recent losses, as traders seek fresh clues during Wednesday’s Asian session. In doing so, the Swiss currency (CHF) pair also portrays the market’s anxiety ahead of the key events.

Tuesday’s pullback could be linked to the risk-off mood, as well as a light calendar in Switzerland. The same contrasts with the US dollar’s broad upside move amid firmer data and hawkish Fedspeak.

The US Dollar Index (DXY) remained mildly bid around the two-decade high as US Durable Goods Orders declined by 0.2% in August versus the market forecasts of -0.4% and the revised down prior reading of -0.1%. Additionally, US CB Consumer Confidence improved for the second consecutive month to 108.00 for September versus 104.5 expected and 103.20 prior.

Despite the upbeat data, Chicago Fed President Charles Evans said, “At some point, it will be appropriate to slow the pace of rate increases and hold rates for a while to assess the impact on the economy." However, markets cared more for St. Louis Federal Reserve Bank President James Bullard who mentioned that they have a serious inflation problem in the US, as reported by Reuters. "More rate rises to come in future meetings." Additionally, Minneapolis Fed President Neel Kashkari said the central bank is moving "very aggressively," and there is a high risk of "overdoing it." 

Elsewhere, Multiple leaks in Russia’s gas pipeline in the Baltic Sea raise woes that the Eurozone’s energy supply problems are likely to be permanent. The same intensify fears of recession inside the bloc, especially amid an absence of impressive data and inflation fears. That said, Reuters quoted European Commission Chief Ursula von der Leyen on Tuesday saying, “The leaks of the Nord Stream pipelines were caused by sabotage, and warned of the "strongest possible response" should active European energy infrastructure be attacked.” This adds to the market’s fears of more geopolitical tension between the West and Russia.

Also weighing on the sentiment could be the multiple rating agencies, including Moody’s, as well as the international institutions like the International Monetary Fund (IMF), which criticized the UK government’s latest approach.

Amid these plays, Wall Street closed mixed but the yields remained firmer and underpinned the US dollar’s safe-haven demand.

To sum up, the risk-aversion wave keeps the pair buyers hopeful but the CHF’s safe-haven status challenges its upside momentum. That said, the Swiss National Bank’s (SNB) Quarterly Bulletin and a speech from Fed Chairman Jerome Powell will be important to watch for fresh impulse as the SNB has recently been aggressive in rate hikes and any such signs may help the bears. On the contrary, Fed Chair Powell’s hawkish comments should be enough to wake up bull.

Technical analysis

USD/CHF bulls remain hopeful unless witnessing a decisive downside break of the previous resistance line from mid-July, around 0.9845.