USD/CHF struggling near 5-week lows, stuck in a range around 200-DMA
• Struggling to gain traction despite positive equities.
• USD languishing near 5-week lows.
• Fails to benefit from surging US bond yields.
• Second-tier US economic data unlikely to provide any impetus.
The USD/CHF pair now seems to have entered a consolidation phase near the very important 200-day SMA and was confined in a narrow trading range.
Currently hovering around the 0.9800 handle, the pair struggled to gain any traction and remained within striking distance of 5-week lows touched in the previous session.
Despite a goodish pickup in the US Treasury bond yields, the US Dollar languished near 5-week lows and has failed to assist the pair to register any meaningful recovery.
Even a sharp rebound in the European equity markets, which tends to weigh on the Swiss Franc's safe-haven appeal, did little to provide any bullish impetus, albeit now seems to be contributing towards limiting deeper losses, at least for the time.
Today's second-tier economic releases from the US - flash manufacturing and services PMI, is unlikely to have any major impact, with the pair more likely to extend its consolidative price action on the last trading day of the week.
Technical levels to watch
A follow-through weakness below the 0.9800 handle, leading to a subsequent break below 0.9780 level would confirm a fresh bearish break and accelerate the downfall towards 0.9735 strong support.
On the upside, 0.9830 level now seems to have emerged as an immediate hurdle, above which the recovery move could get extended towards the 0.9875-80 region en-route to the 0.9900 handle.