USD/CHF recovery attempt stalls below 0.9650

The US dollar reversal from 0.9700 area found support on Tuesday at 0.9575, two-months low, before bouncing back above 0.9600. USD recovery, however, has been limited below 0.9650, with the pair nearly unchanged on the daily chart and both currencies weighed amid a positive market mood.

The USD fails to take advantage of a weak CHF

The greenback opened the day on a bid tone, advancing to session highs at 0.9648 on the back of weaker than expected Swiss Gross Domestic Product data. Swiss economy contracted by 2.6% in the first quarter, a 1.6% deceleration year-on-year, well beyond the market expectations of a 0.9% economic decline.

The US dollar, however, lacked follow-through and returned to levels right above 0.9600 during the US session. Better than expected US ADP employment figures and the ISM non-manufacturing PMI have brightened the market mood, which reflected on positive equity markets and higher demand from riskier assets like the EUR, GBP, AUD or NZD.

USD/CHF hovering above important support at 0.9590

The pair is trading at a short distance from 0.9590 (April 14, May 1 low). A clear breach of this level might increase bearish pressure towards March 27 low at 0.9500 and March 16 low at 0.9390. On the upside, immediate resistance lies at 0.9640/50 (May 21, 28 lows), then probably at the former trendline support, around 0.9680 and 0.9735 (May 25 high).

USD/CHF key levels to watch