USD/CHF recovers further from 2-week lows, inching closer to mid-0.9600s

The USD/CHF pair edged higher through the early European session and is currently placed near the top end of its daily trading range, around the 0.9630 region.

A combination of supporting factors assisted the pair to gain some follow-through traction for the second consecutive session and recover further from near two-week lows, around the key 0.9500 psychological mark set on Monday.

A further recovery in the global risk sentiment, as depicted by a bullish tone around the equity markets, was seen as one of the key factors weighing on the Swiss franc's safe-haven status and remained supportive of the positive move.

Against the backdrop of the Fed's unlimited QE and a massive $2.2 trillion US economic stimulus package, a sharp rebound in Chinese manufacturing sector activity in March boosted investors' confidence and their appetite for riskier assets.

The risk-on mood was further reinforced by a goodish pickup in the US Treasury bond yields, which underpinned the US dollar and contributed to the pair's ongoing recovery move, which took along some short-term trading stops near the 0.9600 mark.

It will now be interesting to see if the pair is able to capitalize on the momentum or runs into some fresh supply at higher levels amid growing market concerns over the global economic fallout from the coronavirus pandemic.

Moving ahead, market participants now look forward to the US economic docket – featuring the release of Chicago PMI and Conference Board's Consumer Confidence index – in order to grab some short-term trading opportunities.

Technical levels to watch