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  • USD/CHF recovers from 0.9610 after Swiss GDP data disappointed bears.
  • Switzerland’s GDP shrank 2.6% QoQ, 1.3% YoY during the Q1 2020.
  • US dollar weakness keeps bears hopeful despite risk-on sentiment challenging further downside.
  • US data, risk catalysts will entertain traders during the busy day.

USD/CHF marks immediate uptick to 0.9615, still down 0.10% on a day, after Swiss GDP release on early Wednesday. The pair seems to cheer the broad US dollar weakness while paying a little heed to the domestic growth figures that portray pre-pandemic economic performance.

Switzerland’s first quarter (Q1) GDP (QoQ) shrank 2.6% versus -2.2% forecast whereas the annualized figures slumped 1.3% against +0.9% market consensus.

Despite the downbeat USD/CHF pair remains mostly in favor of the CHF as the US dollar prints losses against the majority of its counterparts. The US dollar index (DXY) currently drops to the lowest since March 13, 2020, down 0.27% on a day, while flashing 97.42 as a quote.

The reason for the greenback’s latest south run could be traced from the market’s optimism surrounding the economic restart. Also negatively affecting the US currency could be downbeat economic data and hopes of further stimulus from the US Federal Reserve.

Against this backdrop, the US 10-year Treasury yields regain 0.70% mark, after rising over two basis points (bps), while stocks in Asia-Pacific also registers noticeable gains by the press time.

Investors may now keep eyes on US economics, mainly on the ISM Non-Manufacturing PMI, Factory Orders and ADP Employment Change, ahead of Friday’s key employment data. In doing so, the importance of trade/political headlines from the US shouldn’t be overlooked.

Technical analysis

Unless providing a clear break beyond 0.9640, comprising May 20 low and Tuesday’s top, USD/CHF prices are less likely to regain upside momentum. As a result, the weekly low near 0.9573 holds the key to the pair’s downside towards late-March bottom surrounding 0.9500.