USD/CHF flirting with lows near 0.9600 handle post US data

Having posted a session high near 0.9660 region, the USD/CHF pair came under some renewed selling pressure and has now reversed around 100-pips from near three-week highs touched on Friday.

The pair traded with a bearish bias for the second consecutive session and touched a two-week low level near the 0.9600 handle during early NA session. The pair's sharp slide since early European session lacked any fresh fundamental driver and could be solely attributed to prevalent safe-haven demand, which tends to benefit the Swiss Franc.

   •  USD/CHF further upside interest above 0.9682 – Commerzbank

Meanwhile, diminishing prospects of additional Fed rate hike action in 2017, further reinforced by the ongoing slide in the US Treasury bond yields, has failed to extend any support to the US Dollar's tepid recovery move from 10-month lows.

Adding to this, today's disappointing Empire State Manufacturing Index, coming-in at 9.8 for July as compared to 19.8 previous and 15.0 expected, also did little to attract any fresh buying interest at lower levels. Hence, lack of any strong follow-through greenback buying interest further collaborated to the pair's retracement to near 2-week lows. 

GMT
Event
Vol.
Actual
Consensus
Previous
Monday, Jul 17
12:30
9.8
15.0
19.8

Technical levels to watch

On a sustained weakness below the 0.9600 handle, the slide could get extended back towards multi-month lows support near mid-0.9600s before the pair eventually darts towards June 2016 lows support near 0.9520 region en-route the key 0.95 psychological mark.

Conversely, recovery back above 0.9630 horizontal zone could again lift the pair towards 0.9670 strong supply area, above which a fresh bout of short covering could lift the pair beyond the 0.9700 handle towards its next major hurdle near mid-0.9700s.
 

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