USD/CHF renews seven-week high near 0.9100 on downbeat Swiss data, risk catalysts eyed

• USD/CHF picks up bids to refresh multi-day high after disappointing Swiss Real Retail Sales.
• Mixed Swiss GDP, US data fails to provide any clear directions but hawkish Fed bets keep US Dollar bulls hopeful.
• Fears of US default underpin haven demand of US Dollar, bonds.
• Updates from US House of Representatives, Fed’s Beige Book will be crucial for fresh impulse.

USD/CHF justifies softer Swiss statistics amid the risk-off mood heading into Wednesday’s European session as it renews the monthly top near 0.9090 at the latest. In doing so, the Swiss Franc (CHF) pair extends the previous day’s rebound from a one-week low to print the highest level since April 11.

Swiss Real Retail Sales marked the biggest slump in a year with -3.7% YoY figures for May versus -1.4% expected and -1.9% prior. That said, the nation’s first Gross Domestic Product (GDP) for the first quarter (Q1) also marked mixed figures the previous day and underpin the bullish bias surrounding the USD/CHF pair. That said, the Swiss Q1 GDP rose to 0.3% QoQ from 0.0% prior and versus 0.1% market forecasts. However, the nation’s KOF Leading Indicator for May and the Q1 GDP’s YoY figures were downbeat.

On the other hand, the US Conference Board's (CB) Consumer Confidence Index edged lower to 102.30 for May from an upwardly revised 103.70 prior marked in April (from 101.30). Additional details of the survey report mentioned that the one-year consumer inflation expectations ticked down to 6.1% in May from 6.2% in April. Further, the Dallas Fed Manufacturing Business Index for May dropped to -29.1 from -23.4 and versus -19.6 market expectations.

Even so, the market players place heavy bets on June’s 0.25% rate hike and keep the US Dollar on the front foot.

Apart from the hawkish Fed bets, fears emanating from downbeat China activity data for May and looming US default gain major attention. Also weighing on the sentiment, as well as fueling the USD/CHF price, could be the anxiety ahead of the key data/events as the US Republicans show readiness to vote down the agreement to avoid the debt-ceiling expiration.

Against this backdrop, the S&P500 Futures print mild losses around 4,120 by the press time, after a mixed Wall Street close, whereas the US Treasury bond yields stay depressed of late. Furthermore, the US Dollar Index (DXY) picks up bids to around 104.36, after snapping a six-day uptrend near the highest levels in 10 weeks the previous day.

Moving on, the Swiss ZEW Survey for May will offer immediate directions to the USD/CHF pair ahead of the US JOLTS Job Openings for April, expected 9.375M versus 9.59M prior, as well as the Chicago Purchasing Managers' Index for May, likely to fall to 47.0 from 48.6. It should be noted, however, that major attention will be given to the US House of Representatives voting on the debt ceiling agreement and Fed’s Beige Book for a clear guide.

Technical analysis

USD/CHF pair’s successful trading beyond 50-DMA, around 0.9000 by the press time, allows the bulls to aim for a one-month-old ascending resistance line, around 0.9115 at the latest.