USD/CHF refreshes session lows, around 0.9670 amid notable USD supply

The USD/CHF pair retreated around 40 pips from the mid-European session swing high and refreshed daily lows, around the 0.9680 region in the last hour.

The pair failed to capitalize on its attempted intraday positive move, instead met with some fresh supply near the 0.9720 region amid some renewed US dollar selling bias. The already weaker sentiment surrounding the greenback deteriorated further after the first revision of the US GDP came in to show a contraction of 5.0% in the January-March period as compared to 4.8% estimated previously.

The dismal GDP print was accompanied by slightly higher-than-expected Initial Weekly jobless claims, which showed over 2.1 million Americans filed for unemployment-related benefits during the week ending May 23rd. Separately, Durable Goods Orders slumped by 17.2% MoM in April. The reading was better than consensus estimates, albeit did little impress bulls or provide any immediate respite to the USD.

Apart from a broad-based USD weakness, concerns about a further escalation in diplomatic tensions between the United States and China further benefitted the Swiss franc's perceived safe-haven status. However, the upbeat market mood around the equity markets, supported by the optimism over a potential COVID-19 vaccine and hopes of a global economic recovery, might help limit deeper losses for the pair.

Looking at the broader picture, the USD/CHF pair has been oscillating well within a broader trading range since the beginning of May. This makes it prudent to wait for a sustained breakthrough in either direction before traders start positioning for the pair's near-term trajectory.

Technical levels to watch