USD/CHF builds on overnight rebound from 4-week lows, reclaims parity mark

   “¢   The USD builds on the overnight stronger data-led positive move.
   “¢   Risk-on mood weighs on CHF and remained supportive of the move.
   “¢   Traders now eye US economic data for some meaningful impetus.

The USD/CHF pair built on the previous session’s goodish bounce from near four-week lows and is now looking to extend the momentum further beyond the parity mark.

After a knee-jerk intraday slump to 0.9925 area, touched in reaction to failed talks between the US and North Korea, the pair witnessed a sudden turnaround on Thursday following the release of better-than-expected US Q4 GDP growth figures.  

The data triggered a sharp upsurge in the US Treasury bond yields and helped the US Dollar to regain positive traction, which extended through the early European session on Friday and was seen as one of the key factors driving the pair higher.

This coupled with a fresh wave of global risk-on trade, supported by better than expected Chinese manufacturing PMI, dented the Swiss Franc’s safe-haven demand and supported the pair’s ongoing positive momentum back to the familiar trading range.  

It would now be interesting to see if bulls maintain their dominant position and make it through the 1.0020 supply zone as the focus now shifts to the US economic releases – personal income/spending data, ISM manufacturing PMI and revised UoM Consumer Sentiment index.

Technical levels to watch

On a sustained move beyond the mentioned hurdle, the momentum is likely to get extended towards mid-1.0000s before the pair eventually aims back towards conquering the key 1.0100 barrier. On the flip side, the 0.9980-75 region now becomes immediate support to defend, which if broken might accelerate the fall further towards 0.9940 horizontal level en-route the 0.9900 round figure mark.