- USD/CHF trims intraday losses, hangs near weekly top.
- Market sentiment dwindles post US CPI debacle, US data eyed.
- S&P 500 Futures mildly bid, US Treasury yields retreat.
USD/CHF hangs in balance around 9088, following the recent recovery, as the US dollar regains bids ahead of Thursday’s European session. The pair jumped the most since late March the previous day, marking a three-day uptrend, post-US CPI release. While the latest run-up in the greenback seems to ignore a pullback in the US bond yields.
Earlier in Asia, headlines concerning the geopolitical tensions in the Middle East and the coronavirus (COVID-19) fears from Japan weighed on the market sentiment amid a light calendar and off in multiple markets. The sour mood extends afterward as traders look to weekly Jobless Claims and Producer Price Index (PPI) for April for fresh impulse.
On Wednesday, the US Consumer Price Index (CPI) for April rallied the most since 2008, 4.6% YoY versus 3.6% expected and 2.6% prior. The inflation run-up caused market havoc over the US Federal Reserve’s (Fed) future actions, not to forget challenges to fiscal stimulus.
The risk-off mood put a bid under the US Treasury yields, marking the biggest daily gains in two months, currently down 1.5 basis points (bps) near 1.68%. The US dollar was the major gainer due to the bond selling.
Against this backdrop, S&P 500 Futures print mild gains whereas the stocks in Asia-Pacific remain offered.
Given the lack of major data/events, USD/CHF may rely upon the US dollar moves for fresh direction, which in turn suggests the buyer’s return.
Technical analysis
Despite crossing a convergence of 200-day and 100-day SMA, around 0.9085, USD/CHF needs a daily closing beyond the 1.5-month-old resistance line of 0.9090 to direct buyers toward the monthly top near 0.9165.
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