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  • Risk-off atmosphere helps CHF stay strong on Thursday.
  • US Dollar Index is clinging to small gains above the 98 mark.
  • Coming up: Markit Services and Manufacturing PMI data.

After failing to break above the 1.0120 area, the USD/CHF pair came under pressure yesterday and closed the day below the 1.0100 mark and continued to push lower on Thursday as the flight-to-safety dominates the market action. As of writing, the pair is down 0.23% on a daily basis at 1.0072.

The political drama in the UK and the uncertainty surrounding the Brexit deal alongside the ongoing trade conflict between the U.S. and China force investors to stay away from risky assets and ramp up the demand for traditional safe-havens such as the CHF and the JPY. Confirming the sour sentiment, the 10-year US T-bond yield is falling sharply for the second straight day today while the S&P 500 Futures is erasing 0.8% to suggest that Wall Street is likely to open deep in the negative territory.

Meanwhile, the first data from the U.S. revealed that the initial weekly jobless claims decreased by 1K to 211K but was largely ignored by the participants who wait for the IHS Markit’s Manufacturing and Services PMI reports for May (preliminary). Later in the session, FOMC members Kaplan, Daly, Bostic, and Barkin will be delivering speeches.

Technical levels to watch for

The pair could face the initial resistance at 1.0100 (50-DMA/daily high) ahead of 1.0120 (May 20/May 21 high) and 1.0160 (May 10 high). On the downside, supports are located at 1.0065 (daily low), 1.0030 (Apr. 16 low) and 1.0000 (psychological level).