USD/CHF Was Steady Around The 0.9040 Area, Just Below Tuesday’S More Than One-Month Low

USD/CHF traded mildly bullish for the seventh straight session on Wednesday and is now trading just below its highest level in more than a month hit the previous day. However, spot prices remain below 0.9050 as investors await more clues on the path of rate cuts from the Federal Reserve (FED) before building new directional bets.

As such, the market focus will remain on the FOMC minutes to be released later in the US session. Apart from this, traders will also take clues from the US economic calendar, which includes the ADP report on private sector employment and the ISM services PMI. Subsequently, attention will shift to closely watching the US monthly non-farm payrolls data on Friday. This will have a key influence on the recent US dollar (USD) price dynamics and help determine the next directional move for USD/CHF.

Meanwhile, the market has been seeing a higher probability that the Fed will start a monetary policy easing cycle in September. Such bets were reaffirmed by dovish comments from Fed Chairman Jerome Powell on Tuesday, who said that the US economy has made significant progress in combating inflation and is back on track to eliminate it. This has failed to help the dollar attract any meaningful buyers. Nonetheless, the Swiss National Bank (SNB) cut interest rates for the second time in a row at its June meeting, continuing to weaken the Swiss franc and acting as a positive for USD/CHF.

The aforementioned fundamental backdrop seems to favor bullish traders, suggesting that the pair has the least resistance to move upward. Therefore, any corrective pullback is more likely to attract new buyers and remain capped around the 0.9000 psychological mark. However, bulls need to wait for some follow-through buying to emerge before continuing the recent upward trajectory from the 0.8825 area or the three-month low hit on June 18.

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