USD/CHF erases Friday’s tepid recovery gains from two-week lows
• Reviving safe-haven demand offset USD strength.
• Sliding US bond yields adding to the downward pressure.
• This week’s Yellen speech/US economic data in focus.
The USD/CHF pair faced rejection just ahead of the parity mark and has now dropped to fresh session lows, around the 0.9940 region.
The pair struggled to build its early up-move and has now retreated back closer to two-week lows touched on Friday, despite a goodish pickup in the US Dollar demand.
The early greenback up-move now seems to be losing steam amid a sharp slide in the US Treasury bond yields. This coupled with a fresh wave of global risk aversion trade, revived the Swiss Franc's safe-haven demand and was eventually seen weighing on the major at the start of a new trading week.
In absence of any major market moving economic releases, broader market risk sentiment and the US bond yield dynamics would remain key determinants of the pair's movement on Monday.
Moving ahead, the Fed Chair Janet Yellen's scheduled speech on Tuesday, along with this week's important US macro data, including the latest inflation figures, would influence December Fed rate hike expectations and eventually drive the pair in the near-term.
Technical levels to watch
Immediate support is pegged near the 0.9920 level, below which the pair could slide below the 0.9900 handle and head towards testing its next support near the 0.9865-60 region.
On the upside, 0.9970-75 zone now seems to have emerged as immediate resistance, which if cleared could assist the pair to conquer the parity mark and aim towards testing the 1.0030-35 supply zone.