USD/CHF extends steady decline back below parity mark

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   •  Bulls struggle to build on/sustain above the parity mark.
   •  Subdued USD demand does little to lend any support.
   •  Cautious mood further collaborates towards capping gains.

The USD/CHF pair struggled for a firm directional bias and seesawed between tepid gains/minor losses through the early European session.

After yesterday’s good two-way moves, led by the US President Donald Trump’s comments on the Fed’s monetary tightening, the pair was seen consolidating in a range within a familiar trading range held over the past one week or so. 

Despite last bullish breakout, the pair faced difficulty in building on/sustaining its strength beyond the parity mark, with a combination of negative factors further collaborating towards keeping a lid on any meaningful up-move on the last trading day of the week. 

The US Dollar bulls remained on the back-foot through the early European session, which coupled with a weaker tone around European equity markets underpinned the Swiss Franc’s safe-haven demand and was seen weighing on the major.

In absence of any major market-moving economic data, it would be prudent to wait for a decisive break through the near-term trading range before positioning for the pair’s next leg of directional move.

Technical levels to watch

The 0.9960 level is likely to protect the immediate downside and is followed by support marked by weekly lows, around the 0.9925 region, below which the pair could fall to test the 0.9900 handle.

On the flip side, any meaningful up-move beyond the parity mark is likely to confront resistance near the 1.0025 area, which if cleared might lift the pair back towards a one-year high level of 1.0068.
 

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