USD/CHF trades with modest gains around 0.9265-70 area, lacks follow-through
- USD/CHF gained some positive traction on Thursday amid modest pickup in the USD demand.
- The worsening situation in Ukraine benefitted the USD’s status as the global reserve currency.
- Traders now eye the US CPI report for a fresh impetus amid the Russia-Ukraine ceasefire talks.
The USD/CHF pair maintained its mild bid tone through the first half of the European session and was last seen trading with modest intraday gains, around the 0.9265-0.9270 region.
Following the previous day's pullback from the 0.9300 round-figure mark, the USD/CHF pair attracted fresh buying on Thursday and was supported by a modest pickup in demand for the US dollar. Investors remain concerned about the worsening situation in Ukraine, which, in turn, benefitted the greenback's status as the global reserve currency.
In fact, reports indicated that Russian forces have dropped several bombs on the children`s hospital and taken over parts of Mariupol. Moreover, the UK Armed Forces minister - James Stephen Heappey - warned of NATO intervention if Russia uses chemical weapons. This overshadowed optimism over a possible diplomatic resolution to the Russia-Ukraine conflict.
Apart from this, the risk of a further escalation in tensions between Russia and western powers kept investors on the edge, which was evident from an intraday turnaround in the equity markets. The focus now shifts to the release of the US CPI report, due later during the early North American session amid worries about a major inflationary shock.
The data, along with fresh developments surrounding the Russia-Ukraine saga, will influence the USD price dynamics. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities around the USD/CHF pair.
Technical levels to watch