USD/CHF rebounds from daily lows, inches closer to parity

• US 10-year T-bond yield gains nearly 2% on Tuesday.
• US Dollar Index stays above 96.
• Wall Street struggles to erase its losses.

After breaking below the critical parity mark, the USD/CHF pair extended its slide with the major European equity indices pushing lower on Tuesday and touched its lowest level since the first week of February near 0.9960. However, with the 10-year US Treasury bond yield rising almost 2% in the NA session, the pair started to recover its daily losses. As of writing, the pair was virtually unchanged on the day at 0.9995. Despite that recent move, however, the fact that Wall Street stays deep in the red makes it difficult for the pair to gather momentum.

Earlier today, the data from the U.S. showed that pending home sales increased by 4.6% in January to beat the market expectation of 0.4% and factory orders rebounded in December with a small 0.1% increase following November’s 0.5% contraction.  

On the other hand, on the second day of his testimony before the Congress, FOMC Chairman Powell reiterated that the Fed would remain patient  with regards to rate hikes and stated that they would soon be announcing their balance sheet plan. With no other macroeconomic data releases to be published in the remainder of the day, the markets’ risk perception is likely to continue to drive the pair’s price action.

Technical levels to consider