• USD/CHF remains confined well within the recent trading range.
• Improving risk sentiment weighed on the CHF’s safe-haven status.
• The upside remains capped ahead of Trump’s statement on Iran.

The USD/CHF pair seesawed between tepid gains/minor losses on Wednesday and remained confined in a one-week-old trading range, around the 0.9700 handle.

The pair witnessed some selling during the Asian session and dropped back closer to multi-month lows in reaction to intensifying US-Iran tensions. It is worth recalling that Iran – in retaliation to the US drone strike last week – fired more than a dozen ballistic missiles on US-led forces in Iraq.

Traders preferred to stay on the sidelines

The move raised fears of a wider war in the Middle East and boosted demand for traditional safe-haven currencies, including the Swiss franc. However, a dramatic turnaround in the global risk sentiment helped the pair to reverse the early dip and climb to an intraday high level of 0.9729.

The uptick was further supported by some renewed US dollar buying interest. The bid tone surrounding the greenback remained unabated following the release of stronger-than-expected US ADP report, showing that private-sector employers added 202K jobs in December vs. 160K expected.

Despite the supporting factors, the pair struggled to register any meaningful recovery as market participants seemed reluctant to place any aggressive bets ahead of the US President Donald Trump's statement on Iran's attack, scheduled at 1600 GMT.

Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond last Friday's swing high near the 0.9745-50 region, before positioning for any further near-term appreciating move for the major.

Technical levels to watch