“¢ The USD fails to capitalize on the overnight bounce and caps the recovery.
“¢ Fading safe-haven demand weighs on the CHF and remained supportive.
The USD/CHF pair finally broke out of its daily consolidative trading range and was now seen building on the overnight goodish rebound from 4-1/2 month lows.
The US Dollar made a solid comeback on Wednesday following the release of upbeat US ISM non-manufacturing PMI and prompted some aggressive short-covering move, helping the pair to recover nearly 100-pips from an intraday low level of 0.9954 – the lowest since mid-January.
Meanwhile, the greenback failed to capitalize on the overnight positive move and remained on the defensive amid increasing bets for an eventual Fed rate cut. This coupled with a flurry of trade-related headlines led to a subdued/range-bound price action through the early part of Thursday’s trading session.
However, the recent improvement in the global risk sentiment, as depicted by a follow-through recovery in equity markets, undermined the Swiss Franc’s relative safe-haven status and turned out to be the only factor that helped regain some positive traction in the past hour or so.
Moving ahead, Thursday’s US economic docket features second-tier data and seems unlikely to provide any meaningful impetus. However, some repositioning trade, ahead of Friday’s important release of the closely watched US monthly jobs report – popularly known as NFP, might infuse some volatility and produce short-term trading opportunities.
Technical levels to watch
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