USD/CHF plummets to over 3-week lows, weakens further below parity mark

   “¢   Weaker equities underpin CHF’s safe-haven demand and prompt some fresh selling.
   “¢   The USD struggles to register any meaningful recovery and fails to lend any support.
   “¢   Traders now eye US durable goods orders/Powell’s testimony for some fresh impetus.

After an initial uptick to levels just above the parity mark, the USD/CHF pair met with some aggressive supply and tumbled to fresh multi-week lows in the last hour.

The pair finally broke down of its sideways consolidative trading range, held over the past one week or so and was now seen extending this month’s recent rejection slide from the key 1.0100 hurdle.  

A combination of factors provided a goodish lift to the Swiss Franc (CHF), which coupled with a subdued US Dollar price action exerted some fresh downward pressure since the early European session on Wednesday.

With investors looking past the latest optimism over the US-China trade talks, a slight deterioration in the global risk appetite, as depicted by weaker sentiment around equity markets, underpinned the CHF’s safe-haven demand.

Adding to this, a sharp rebound in Swiss Economic Expectations Index, coming in at -16.6 for February as compared to -44.0 previous, further provided an additional boost to the domestic currency.  

Meanwhile, the US Dollar languished near the lowest level since Feb. 5, touched in the aftermath of the Fed Chair Jerome Powell’s overnight dovish message, and did little to stall the pair’s sharp intraday decline.

Moving ahead, today’s US economic docket, highlighting the release of durable goods order, followed by Powell’s second appearance before the Congress, will now be looked upon for some fresh impetus later in the day.

Technical levels to watch

A follow-through selling has the potential to continue dragging the pair further towards 0.9940 horizontal support en-route the 0.9900 round figure mark. On the flip side, the key 1.0000 psychological mark now becomes immediate hurdle and is followed by the 1.0025 supply zone, which if cleared might trigger a near-term short-covering bounce.