USD/CHF erases daily gains, remains limited by 0.9470

  • Pair back to the 0.9450 after being rejected from 0.9480. 
  • SNB meeting on Thursday, FOMC next week. 

USD/CHF is about to end the day with modest gains and far from the highs. The US dollar lost strength during the American session and pulled back trimming gains. The Swiss franc failed to rise clearly despite risk aversion. 

Earlier today the pair bottomed at 0.9420/25 (6-day low) and rebounded sharply to the upside. It peaked after the release of US data at 0.9480. It found resistance at a downtrend line and recently dropped to 0.9445. The pair is hovering around 0.9450, up only 10 pips from yesterday’s close. 

Data released today showed that US retail sales contracted 0.1% in February versus a 0.3% gain expected while core sales climbed 0.2%. The Producer Price Index rose 0.2% above the 0.1% of market consensus. The greenback fell after those numbers were released but quickly rebounded. On Thursday, the NY Empire Index, Jobless claims and the Philly Fed are due. 

In Switzerland, the key event will be the Swiss National Bank decision. No change in rates is expected. The central bank will also release the Quarterly Bulletin. 

Technical outlook 

USD/CHF failed today to break a downtrend line at 0.9470/75 before retreating to 0.9445. The mentioned line continues to support a bearish short-term outlook. If the pair rises and holds on top of 0.9475, the greenback could rise further to test 0.9500. 

To the downside, USD/CHF an uptrend line at 0.9430 supports the bullish outlook. A break below that line would expose immediately weekly lows at 0.9420 and then, the strong horizontal support at 0.9400/05. 

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