USD/CHF climbs to 0.9770 area as USD tries to shake off dovish Fed commentary

• US Dollar Index finds support ahead of 95, stays positive on the day.
• US stocks futures point to a negative start to the day.

After touching its lowest level in more than three months at 0.9715 earlier today, the USD/CHF started to recover its recent losses and turned positive on the day. As of writing, the pair was up 0.4% on the day at 0.9773.

Yesterday’s sharp drop was triggered by the heavy selling pressure the greenback encountered following the dovish  comments from Fed officials and the cautious tone that the FOMC adopted in its December meeting minutes. With the greenback continuing to weaken against its rivals in the Asian session on Wednesday, the US Dollar Index slumped to a multi-month low at 95.03 before gaining traction.  

As investors are waiting for the FOMC chairman Powell’s and Chicago Fed President Evans’ speeches later in the session, the DXY adds 0.1% on the day at 95.23.  

Meanwhile, disappointing holiday sales figures from major retailers in the U.S. weigh on the stock futures and suggest that Wall Street is likely to open the day in the negative territory. If major equity indexes in the U.S. struggle to carry their winning streak into a fifth straight day today, the risk-off mood could make it difficult for the pair to push higher.

Technical levels to consider