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  • USD/CHF met with some fresh supply on Thursday and stalled the previous day’s positive move.
  • A turnaround in the global risk sentiment underpinned the safe-haven CHF and exerted pressure.
  • The USD remained supported by less dovish FOMC minutes and might help limit the downside.

The USD/CHF pair edged lower through the early European session and was last seen trading near daily lows, with bears now eyeing a break below the 0.9100 mark.

The pair came under some fresh selling pressure on Thursday and eroded a part of the previous day’s strong positive move of around 135 pips from the vicinity of the key 0.9000 psychological mark, or multi-year lows. A turnaround in the global risk sentiment – as depicted by a steep decline in the equity markets – benefitted the safe-haven Swiss franc and exerted some pressure on the USD/CHF pair.

On the other hand, the US dollar remained well supported by Wednesday’s FOMC meeting minutes, which offered few clues on whether the Fed will adopt a more dovish policy framework in the months ahead. Adding to this, a number of Fed members judged that yield caps and targets were not warranted as it would likely provide only modest benefits in the current environment and disappointed the USD bears.

A mildly bid tone surrounding the greenback might turn out to be a key factor that might help limit any deeper losses for the USD/CHF pair, at least for the time being. Market participants now look forward to the US economic docket, featuring the release of Philly Fed Manufacturing Index and Initial Weekly Jobless Claims. The data might influence the USD price dynamics and provide some trading impetus.

From a technical perspective, the pair’s inability to attract any strong follow-through buying suggests that the near-term bearish trend might still be far from being over. This makes it prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move.

Technical levels to watch