USD/CHF struggles for a firm intraday direction, flat-lined below 0.9300 mark

• A combination of diverging forces failed to provide any meaningful impetus to USD/CHF.
• The USD witnessed some long-unwinding trade and acted as a headwind for the major.
• The risk-on impulse undermined the safe-haven CHF and extended support to the pair.

The USD/CHF pair seesawed between tepid gains/minor losses through the mid-European session and was last seen trading around the 0.9280 region, nearly unchanged for the day.

The pair gained some traction during the early part of the trading on Wednesday, albeit continued with its struggle to find acceptance or capitalize on the move beyond the 0.9300 round-figure mark. Renewed hopes of a diplomatic solution to the war in Ukraine turned out to be a key factor that dented the US dollar's status as the global reserve currency and acted as a headwind for the USD/CHF pair.

Turkey's top diplomat Mevlut Cavusoglu announced earlier this Wednesday that Russian Foreign Minister Sergey Lavrov and his Ukrainian counterpart Dmytro Kuleba have agreed to meet on Thursday. This would be the first potential talk between the two officials since Russian troops invaded Ukraine on February 24, raising expectations for a diplomatic solution and an end to the war in Ukraine.

The news provided much-needed relief to investors, which was evident from a strong positive reaction in the equity markets. The risk-on impulse, along with some verbal intervention by the Swiss National Bank earlier this week, undermined the Swiss franc and extended support to the USD/CHF pair. That said, a further escalation in tensions between Russia and the West might cap the optimism.

In fact, US President Joe Biden on Tuesday imposed an immediate ban on Russian oil and other energy imports. Moreover, Britain announced that it would phase out the import of Russian oil by the end of 2022 and the European Union agreed on new sanctions against Russian leaders. The Russian foreign ministry reportedly said that the response to the Western sanctions will be sensitive and precise.

This comes on the back of growing market concerns about the rapidly deteriorating global economic outlook and a major inflationary shock, which should help revive the USD demand. Hence, it will be prudent to wait for some meaningful decline before confirming that the USD/CHF pair has topped out. Conversely, bulls might wait for sustained strength above the 0.9300 mark before placing fresh bets.

Next on tap is the release of JOLTS Job Openings from the US, due later during the early North American session. The data, however, might do little to influence the USD price dynamics or provide any meaningful impetus to the USD/CHF pair as the focus remains glued to developments surrounding the Russia-Ukraine saga.

Technical levels to watch