USD/CHF holds weaker near 3-week lows ahead of key US macro data

   •  Remains heavily offered for the second consecutive session.
   •  Risk-off mood boosts Swiss Franc’s safe-haven appeal.
   •  Focus remains on upcoming US inflation report and monthly retail sales.

The USD/CHF pair remained heavily offered for the second consecutive session and is currently placed at over 3-week lows, just above mid-0.9800s.

The pair extended Monday's rejection slide from closer to the parity mark and was being weighed down by persistent US Dollar selling bias. Despite yesterday's upbeat US economic data, mounting uncertainty over the fate of a major US tax overhaul plan continued exerting some downward pressure on the greenback and was seen weighing on the major.

Adding to this, the prevalent risk-off mood, as depicted by steep losses across global equity markets and reinforced by tumbling US Treasury bond yields, provided an additional boost to the Swiss Franc's safe-haven appeal and further collaborated to the pair's bearish slide, farther below the 0.9900 handle.

Meanwhile, the market seems to have largely negated comments by SNB chair Jordan, noting that the Swiss Franc is highly valued and FX intervention was still appropriate, with the global flight to safety and broad-based USD weakness acting as key drivers of the pair's downward trajectory through the mid-European session.

Investors' on Wednesday would remain focused on the upcoming key US economic reports - inflation and monthly retail sales data, which would be looked upon for some immediate respite for the USD bulls. 

   •  US: Core inflation set to remain below target - Westpac

Technical levels to watch

A follow-through weakness below mid-0.9800s is likely to get extended towards the very important 200-day SMA support near the 0.9815 region.

On the upside, 0.9880 level now seems to act as an immediate hurdle, above which the pair is likely to surpass the 0.9900 handle and aim towards testing the 0.9930-35 supply zone.
 

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