“¢ Stability in equity markets undermine CHF’s safe-haven status and helped to limit early dip.
“¢ A modest pickup in the USD demand provided an additional boost and remains supportive.
The USD/CHF pair reversed a mid-European session knee-jerk fall to the 0.9900 neighborhood and has now recovered around 45-pips from daily lows.
Even as the recent inversion of the 3-month and 10-year Treasury yields – for the first time since 2007, continue to fuel recessionary fears, stability in equity markets dampened the Swiss Franc’s safe-haven demand and extended some support to the major.
The pair once again showed some resilience below the very important 200-day SMA and was further supported by a modest pickup in the US Dollar demand following the release of US trade balance figures, showing a larger than expected drop in the trade deficit for January.
Despite a good two-way move, the pair remains well within a broader trading range held over the past one week or so. Hence, it would be prudent to wait for a convincing break in either direction before traders start positioning for the pair’s near-term trajectory.
Technical levels to watch
The 0.9965-70 region might continue to act as an immediate resistance, above which the pair seems all set to reclaim the parity mark and aim towards testing its next hurdle near the 1.0030-35 area. On the flip side, the 0.9925-20 region (200-DMA), closely followed by the 0.9900 handle now seems to have emerged as immediate support, which if broken would mark a near-term bearish breakdown and turn the pair vulnerable to extend its recent sharp retracement slide from levels beyond the 1.0100 round figure mark.
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