USD/CHF recovers early lost ground, jumps back closer to 0.9900 handle

The USD/CHF pair quickly reversed an early North-American session dip and has now rallied back closer to the top end of its daily trading range.

In a delayed reaction to hotter-than-expected US core CPI print, a goodish pickup in the US Treasury bond yields helped the US Dollar to recover the early lost ground and turned out to be one of the key factors behind the pair's intraday bounce.

In fact, consumer inflation excluding food and energy prices (the so-called core CPI) jumped 0.3% in June, marking the biggest rise in a year and a half, while the yearly rate also edged up to 2.1% from 2.0% recorded in the previous month and expected. 

Adding to this, the number of people applying for unemployment related benefits unexpectedly fell to the lowest level in more than three months during the week ended July 6, which provided an additional boost to the greenback and remained support.

This coupled with improving risk sentiment - as depicted by a positive mood around equity markets, dented demand for perceived safe-haven currencies - including the Swiss Franc, and further collaborated to the pair's sudden rise of around 40-45 pips.

It would now be interesting to see if the current leg of an up-move marks the resumption of the recent recovery move from yearly lows or meets with some fresh supply at higher levels amid reviving hopes for an aggressive Fed rate cut move later this July.

Technical levels to watch