“¢ A modest USD retracement/risk-off mood prompts some profit-taking.
“¢ Surging US bond yields might continue to limit any meaningful slide.
The USD/CHF pair quickly reversed an early European session dip to the 0.9900 handle and is currently placed at the top end of its daily trading range, or six week tops.
The pair struggled to build on overnight bullish breakout momentum above 100-day SMA, with a combination of negative factors prompting some profit-taking, especially after the pair’s relentless rally of nearly 350-pips over the past two weeks or so.
Against the backdrop of a modest US Dollar retracement, the prevalent cautious mood across global equity markets underpinned the Swiss Franc’s safe-haven demand and was seen as one of the key factors exerting some downward pressure.
The USD downtick, however, remained cushioned amid the ongoing upsurge in the US Treasury bond yields. In fact, the benchmark 10-year yields reached a new seven-year high level of 3.22% on Thursday and helped limit any deeper corrective slide.
It would now be interesting to see if bulls are able to regain control or the pair continues with its consolidative price-action amid absent market moving economic releases and ahead of Friday’s keenly watched US monthly jobs report (NFP).
Technical levels to watch
On a sustained move beyond the 0.9925 level, the pair is likely to accelerate the up-move towards testing the 0.9965-70 supply zone before eventually darting towards reclaiming the parity mark.
On the flip side, the 0.9900 handle now seems to have emerged as an immediate support, which if broken might accelerate the fall towards 100-day SMA resistance turned support near the 0.9860 region.
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