USD/CHF hits fresh monthly low and rebounds, US data awaited

Haresh Menghani FXStreet

After yesterday's tepid recovery move, the USD/CHF pair came under some renewed selling pressure and dropped to retest the very important 200-day SMA support near 0.9940 level.

The pair, however, has managed to bounce off few pips from three-week lows and is currently trading around 0.9960 region as traders now look forward to the US economic docket for some fresh impetus. Persistent bearish sentiment surrounding the US Dollar, against the backdrop of the ongoing geopolitical tensions and recent jawboning by the US President Donald Trump, seems to be key factor weighing on the major.

Adding to this, market anxiety, ahead of the upcoming first round of French Presidential election on Sunday, has been supportive of the Swiss Franc's safe-haven appeal and also collaborated to the pair's downslide to the lowest level since March 29.

Meanwhile, a follow through recovery in the US treasury bond yields helped limit further downslide and assisted the pair to defend 200-day SMA important support, at least for the time being.

• CHF still under pressure – Danske Bank

Focus now shifts to the US economic docket, featuring the release of weekly jobless claims and Philly Fed manufacturing index. Later during the NY session, the pair might also get influence by the US Treasury Secretary Steven Mnuchin speech at the Institute of International Finance Policy Summit.

• US: Initial jobless claims and Philly Fed Survey data awaited - Nomura

Technical levels to watch

Bears would be eyeing for a decisive break through 200-day SMA support near 0.9950 region, below which the pair is likely to accelerate the slide towards 0.9915-10 horizontal support en-route 0.9885 support.

On the upside, 0.9980-80 zone now seems to have emerged as immediate resistance, which if cleared decisively could trigger a short-covering rally and lift the pair beyond the parity mark towards its next resistance near 1.0015-20 area ahead of 1.0040 level.

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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