USD/CHF recovers toward 0.9100, eyes on US data

• USD/CHF rises toward 0.9100, tries to snap 10-day losing streak. 
• US Dollar Index posts small daily gains near 93.00.
• Focus shifts to key macroeconomic data releases from US.

The USD/CHF pair plunged to its lowest level since January of 2015 at 0.9057 on Friday but staged a recovery ahead of the American session. As of writing, the pair was posting small daily gains at 0.9092.

The risk-averse market environment and the broad-based selling pressure surrounding the USD caused USD/CHF to close the ninth straight day in the negative territory on Thursday.

The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, dropped below 93.00 for the first time in more than two years pressured by slumping US Treasury bond yields. After the US Bureau of Economic Analysis (BEA) reported that the economic activity in the US contracted by 32.9% on a yearly basis in the second quarter, the 10-year US T-bond yield dropped to its lowest level in more than four months at %0.522.

Later in the session, the BEA will release the Personal Spending and Personal Income figures for June. Ahead of these data, the DXY is staying in the positive territory near 93.00.

USD/CHF technical outlook

Credit Suisse analysts think that a close below the 2015 May low at 0.9072 could cause the pair to extend its slide toward 0.9047 ahead of the psychological barrier at 0.9000. 

“Below here though would then see support at 0.8936, removal of which would see the 50% retracement of the entire 2015/2016 upswing at 0.8875 next, where we would then expect a more important effort to hold,” analysts added. “In contrast, as the daily RSI momentum is still in heavily oversold territory we remain on alert for a potential reversal higher or minor setback in the near-term.”

Additional levels to watch for