USD/CHF trades with modest gains above mid-0.8800s, weaker USD acts as a headwind

USD/CHF turns positive for the second successive day, albeit lacks follow-through buying.
Receding safe-haven demand undermines the CHF and lends some support to the major.
The emergence of fresh USD selling acts as a headwind ahead of the key US NFP report.

Haresh Menghani FXStreet

The USD/CHF pair attracts some dip-buying near the 0.8835 region on Friday and turns positive for the second successive day, though lacks bullish conviction. The pair trades just above mid-0.8800s during the early European session and so far, is seen struggling to capitalize on the overnight bounce from its lowest level since January 2021.

A modest recovery in the US equity futures undermines the safe-haven Swiss Franc (CHF) and turns out to be a key factor acting as a tailwind for the USD/CHF pair. The upside, however, remains capped amid the emergence of fresh selling around the US Dollar (USD), led by concerns about the US banking sector and the Federal Reserve's (Fed) less hawkish outlook. Investors remain worried about a full-blown banking crisis in the US and now fear that regional lender PacWest Bancorp could be the next potential domino to fall.

The US central bank, meanwhile, outlined on Wednesday a more stringent and data-driven approach to hiking rates further. Moreover, Fed Chair Jerome Powell signalled that the central bank was close to hitting the terminal rate of the current tightening cycle. Markets took this as a sign that the central bank could eventually pause its year-long rate-hike cycle in June. This, along with the concerns over the US debt ceiling, continues to weigh on the Greenback and might keep a lid on any meaningful recovery for the USD/CHF pair.

Traders might also refrain from placing aggressive bets and prefer to wait on the sidelines ahead of the release of the closely-watched US monthly employment details, due later during the early North American session. The popularly known NFP report will play a key role in influencing the near-term USD price dynamics and help investors to determine the next leg of a directional move for the USD/CHF pair.

Technical levels to watch

USD/CHF

Overview
Today last price	0.8859
Today Daily Change	0.0001
Today Daily Change %	0.01
Today daily open	0.8858

Trends
Daily SMA20	0.8946
Daily SMA50	0.9126
Daily SMA100	0.9188
Daily SMA200	0.9434

Levels
Previous Daily High	0.8892
Previous Daily Low	0.882
Previous Weekly High	0.8976
Previous Weekly Low	0.8852
Previous Monthly High	0.9198
Previous Monthly Low	0.8852
Daily Fibonacci 38.2%	0.8864
Daily Fibonacci 61.8%	0.8847
Daily Pivot Point S1	0.8821
Daily Pivot Point S2	0.8785
Daily Pivot Point S3	0.875
Daily Pivot Point R1	0.8893
Daily Pivot Point R2	0.8928
Daily Pivot Point R3	0.8964

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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