• USD/CHF edged lower for the second successive day, though the downside seems cushioned.
  • A softer risk tone underpinned the safe-haven CHF and exerted some pressure on the major.
  • Elevated US bond yields acted as a tailwind for the USD and helped limit any deeper losses.

The USD/CHF pair recovered a major part of its early lost gound and was last seen trading with only modest intraday losses, around mid-0.9100s during the first half of the European session.

The pair extended the previous day's retracement slide from the weekly swing high, around the 0.9175 region and edged lower for the second successive day, on Thursday. A weaker tone around the European equity markets underpinned the safe-haven Swiss franc, which, in turn, was seen as a key factor that exerted pressure on the USD/CHF pair.

On the other hand, elevated US Treasury bond yields, bolstered by the prospects for a faster policy tightening by the Fed, acted as a tailwind for the US dollar. This, in turn, helped limit any further losses for the USD/CHF pair, warranting some caution for aggressive bearish traders before positioning for any further depreciating move.

Investors seem convinced that the Fed would begin raising interest rates soon and have fully priced in an eventual liftoff in March to combat stubbornly high inflation. The expectations were reaffirmed by last week's data, which showed that the headline US CPI surged to its highest level since June 1982 and core CPI registered the biggest advance since 1991.

The market focus will remain glued to the upcoming FOMC monetary policy meeting on January 25-26. The outcome will be looked upon for clearer signals about the likely timing when the Fed will be commencing its rate hike cycle. This will influence the near-term USD price dynamics and provide a fresh directional impetus to the USD/CHF pair.

In the meantime, traders on Thursday will take cues from the US macro releases – the Philly Fed Manufacturing Index, Weekly Initial Jobless Claims and Existing Home Sales data. This, along with the US bond yields, will drive the USD demand. Apart from this, the broader market risk sentiment should produce some trading opportunities around the USD/CHF pair.

Technical levels to watch

USD/CHF

Overview
Today last price 0.9155
Today Daily Change -0.0001
Today Daily Change % -0.01
Today daily open 0.9156
 
Trends
Daily SMA20 0.9171
Daily SMA50 0.9215
Daily SMA100 0.9215
Daily SMA200 0.9164
 
Levels
Previous Daily High 0.9178
Previous Daily Low 0.9145
Previous Weekly High 0.9278
Previous Weekly Low 0.9092
Previous Monthly High 0.9295
Previous Monthly Low 0.9102
Daily Fibonacci 38.2% 0.9157
Daily Fibonacci 61.8% 0.9165
Daily Pivot Point S1 0.9141
Daily Pivot Point S2 0.9127
Daily Pivot Point S3 0.9108
Daily Pivot Point R1 0.9174
Daily Pivot Point R2 0.9192
Daily Pivot Point R3 0.9207

 

 

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