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  • The risk-on mood undermined the safe-haven CHF and extended some support to USD/CHF.
  • Sliding US bond yields continued weighing on the USD and kept a lid on the intraday uptick.
  • Investors now look forward to important US macro releases for some meaningful impetus.

The USD/CHF pair struggled to preserve its modest intraday gains and has now retreated to the lower end of its daily trading range, around the 0.9220-25 region.

The pair built on the previous day’s goodish rebound from the very important 200-day SMA support near the 0.9185 region and gained some traction through the first half of the trading action on Thursday. The underlying bullish sentiment in the financial markets undermined demand for the safe-haven Swiss franc and was seen as a key factor that provided a modest lift to the USD/CHF pair.

That said, sustained US dollar selling bias capped the upside, rather exerted some downward pressure. Following Tuesday’s rather unimpressive US CPI report, investors now seem convinced that the Fed will keep interest rates low for a longer period. This, in turn, contributed to the ongoing decline in the US Treasury bond yields and dragged the key USD Index to four-week lows on Thursday.

It will now be interesting to see if the USD/CHF pair is able to regain traction or the emergence of fresh selling at higher levels is seen as a fresh trigger for bearish traders. A subsequent weakness below the 0.9200 mark will suggest that the recent pullback from nine-month tops is still far from being over and pave the way for a slide further below the 200-DMA support.

Market participants now look forward to the US economic docket, highlighting the releases of monthly Retail Sales, Philly Fed Manufacturing Index and the usual Initial Weekly Jobless claims. This, along with the US bond yields, will influence the USD. Apart from this, the broader market risk sentiment might further produce some trading opportunities around the USD/CHF pair.

Technical levels to watch