USD/CHF fades a knee-jerk bullish spike, quickly retreats back below parity mark

Once again fails to sustain above the parity mark and retreats from 1.0025-30 supply zone.
The global flight to safety continues to benefit the CHF and exerted some downward pressure.
Holds above 200-day SMA as bulls now eye US ISM non-manufacturing PMI for a fresh impetus.

Haresh Menghani FXStreet

The USD/CHF pair faded a knee-jerk bullish spike to over 2-1/2 month tops and quickly retreated around 40 pips during the early European session on Thursday.

The pair continued with its struggle to capitalize on the momentum beyond the parity mark and once again met with some fresh supply near the 1.0025-30 region. The prevailing risk-off mood continued underpinning demand for traditional safe-haven currencies, including the Swiss Franc (CHF) and exerted some fresh downward pressure on the major.

Risk-off mood continues to cap gains

The global flight to safety was further reinforced by the ongoing downfall in the US Treasury bond yields to the lowest level since September 9. This coupled with concern about slowing economic growth in the United States forced investors to start pricing in another interest rate cut by the Fed in October and kept the US Dollar bulls on the defensive.

It is worth recalling that data released on Tuesday showed that the US manufacturing sector activity recorded a sharp contraction in September. This was followed by the ADP report on Wednesday, which showed that the US private-sector employers added modest 135K jobs in the previous month and raised odds of further policy easing by the Fed.

Despite the pullback, the pair traded with a mild positive bias and has also managed to hold its neck above the very important 200-day SMA, warranting some caution for bearish traders and positioning for any meaningful depreciating move ahead of Friday's release of the closely watched US monthly jobs report - popularly known as NFP.

In the meantime, Thursday’s US economic docket - highlighting the release of ISM non-manufacturing PMI - will be looked upon for some short-term trading opportunities later during the early North-American session.

Technical levels to watch

USD/CHF

Overview
Today last price	0.9989
Today Daily Change	0.0021
Today Daily Change %	0.21
Today daily open	0.9968

Trends
Daily SMA20	0.9919
Daily SMA50	0.9859
Daily SMA100	0.989
Daily SMA200	0.995

Levels
Previous Daily High	1.0027
Previous Daily Low	0.9921
Previous Weekly High	0.995
Previous Weekly Low	0.9843
Previous Monthly High	0.9988
Previous Monthly Low	0.9797
Daily Fibonacci 38.2%	0.9987
Daily Fibonacci 61.8%	0.9961
Daily Pivot Point S1	0.9917
Daily Pivot Point S2	0.9866
Daily Pivot Point S3	0.9811
Daily Pivot Point R1	1.0023
Daily Pivot Point R2	1.0078
Daily Pivot Point R3	1.0129

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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