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The initial risk-off bias seems to be spreading into the European trading hours today, bolstering the demand for safe havens like CHF and JPY and thus prompting spot to recede towards the 0.9600 handle.
The recurrent weakness around the greenback has been heavily weighing on the pair as of late, testing fresh 2016 lows around 0.9570 on Thursday.
Next of relevance will be Retail Sales in Switzerland, followed by the more relevant US calendar: Non-farm Payrolls, ISM Manufacturing, Markit’s Manufacturing PMI and Reuters/Michigan index.
The USD/CHF pair turns negative at 0.9647, testing daily lows reached at 0.9643 in early Asia. The major came under renewed selling pressure in the last hour largely on the back of stalling US dollar recovery from five-month lows versus its six major competitors. The USD index gains 0.13% to 94.92, versus 0.23% seen earlier today.
The immediate focus now remains on Swiss retail sales due out shortly ahead of the US datasets due later in the NY session. Besides, SNB board member Maechler’s speech will be closely heard for fresh insights on the central banks’ take on the CHF level.
The USD/CHF pair trades 0.10% higher at 0.9746, easing slightly from fresh session highs printed at 0.9750. The major reverses a small portion of the previous massive sell-off and strives hard to resume the ongoing broader uptrend, as the US dollar picks-up momentum ahead of the crucial Fed Yellen’s speech due later in the day. The USD index rises 0.10% to 96.09, recovering from a dip to 95.84 levels.
Markets await the US consumer confidence and S&P/CS Composite-20 HPI index for further momentum on the pair, following mixed batch of economic data released on Monday.
Swiss National Bank (SNB) left sight deposit rate unchanged at -0.75% as expected. The 3-month labor upper target and lower target were left unchanged at -1.25% and -0.75% respectively.
The USD/CHF spot could test major hurdle at 1.0124 (Jan 5 high) if it manages to chew through offers around the immediate resistance of 1.0040. On the other hand, a break below 0.9981 (50-DMA) could shift risk in favor of a drop to daily low of 0.9944.
The USD/CHF pair is now up 0.09% at 0.9918 facing the next up barrier at 0.9976 (55-day sa) ahead of 1.0031 (61.8% Fibo of 1.0262-0.9658) and then 1.0120 (76.4% Fibo of 1.0262-0.9658). On the other hand, a break below 0.9890 (20-day SMA) would open the door to 0.9801 (23.6% Fibo of 1.0262-0.9658) and then 0.9775 (200-day SMA).
The USD/CHF pair currently trades around 0.9975 levels. The immediate resistance is seen at 1.00 handle, above which the pair could target 1.0037 (Monday’s high). On the other hand, a break below 0.9953 (100-DMA) would open doors for a slide to 0.9929 (5-DMA).