USD/CHF sticks to modest recovery gains near mid-0.9700s, lacks follow-through

• Improving risk sentiment weighed on the CHF’s safe-haven status and helped bounce off lows.
• The USD fails to benefit from rebounding US bond yields and does little to provide any boost.
• Traders look forward to scheduled speeches by FOMC members for some short-term impetus.

The USD/CHF pair struggled to capitalize on its goodish intraday bounce from seven-week lows and was now seen oscillating in a narrow trading band, around mid-0.9700s.
 
The pair stalled its recent sharp corrective slide 1-1/2 month tops - set in the aftermath of last week's hawkish rate cut by the Fed, and managed to find decent support near the 0.9700 handle amid a slight improvement in the global risk sentiment, which tends to undermine demand for traditional safe-haven currencies - including the Swiss Franc.
 
With investors still digesting the recent escalation in trade tensions between the world's two largest economies, the PBOC's firmer-than-expected Yuan fixing helped the global financial markets to stabilize a bit on Tuesday - evident from a mildly positive tone around equity markets and reinforced by a goodish pickup in the US Treasury bond yields.
 
Meanwhile, the US Dollar failed to benefit from rebounding US Treasury bond yields and languished near two-week lows - below mid-97.00s, and could be cited as the only factor that failed to provide any meaningful impetus or assist the pair to build on its strong intraday rebound of around 50-55 pips.
 
Hence, it remains prudent to wait for a strong follow-through buying before confirming that the pair might have bottomed out in the near-term and positioning for any further recovery, possibly back towards the 0.9800 round figure mark, amid absent relevant market moving economic releases from the US.
 
Moving ahead, traders on Tuesday will take cues from scheduled speeches by FOMC members - Chicago Fed President Charles Evans and St. Louis Fed President James Bullard, which might influence the USD price dynamics and produce some short-term opportunities during the North-American session.

Technical levels to watch