USD/CHF refreshes 2-month tops and retreats

Haresh Menghani FXStreet

• A subdued USD price action fails to assist the pair to build on the positive momentum.
• Risk-off mood further underpins CHF’s safe-haven status and keep a lid on further up-move.
• Still remains on track to post gains for the third week in the previous four.

The USD/CHF pair climbed to fresh two-month tops in the last hour, albeit quickly surrendered early gains and is currently placed at the lower end of its daily trading range.

After yesterday's good two-way price action, led by a combination of diverging forces, the pair regained positive traction on the last trading day of the week and seemed rather unaffected by a subdued US Dollar price action.

With investors looking past the latest FOMC meeting minutes, the greenback now seems to have entered a bullish consolidation phase and failed to provide any fresh bullish impetus to the major.

Adding to this, a fresh wave of global risk-aversion trade was seen underpinning the Swiss Franc's safe-haven status and further collaborated towards keeping a lid on any strong follow-through.

Despite a modest pull-back, the pair, so far, has managed to hold with a mildly positive tone for the fourth consecutive session and remains on track to post gains for the third week in the previous four.

On the economic data front, the release of existing home sales data from the US seems unlikely to provide any meaningful impetus. Hence, Atlanta Fed President Raphael Bostic's scheduled speech will be looked upon for some short-term trading opportunities on the last trading day of the week.

Technical levels to watch

On a sustained move above the 0.9975-80 immediate resistance now seems to lift the pair beyond the parity mark towards its next major hurdle near the 1.0020-25 region. On the flip side, any meaningful retracement is likely to find strong support near the 0.9920 horizontal zone and is closely followed by the 0.9900 handle, below which the pair is likely to slide back towards 100-day SMA, near the 0.9865 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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