USD/CHF pair came under renewed selling pressure
After an initial recovery attempt to session tops near 0.9765 region, the USD/CHF pair came under renewed selling pressure and tumbled to fresh yearly lows near the 0.9700 handle.
The recent political drama over the US President Donald Trump’s abrupt firing of FBI Director James Comey has been perceived as derailing Trump’s promised pro-growth fiscal policies and is weighing heavily on the greenback.
Persistent US Dollar selling interest, with the key US Dollar Index sliding below the 97.00 handle to hit fresh six month lows, has been the key factor behind the pair’s sharp drop of over 400-pips from one-month high level of 1.0100 level touched on May 11.
• US Dollar tumbles to YTD lows near 96.80
This coupled with the prevalent risk-off environment was further seen boosting the Swiss Franc’s safe-haven appeal and also collaborated to the pair’s prolonged bearish slide to the lowest level since the US Presidential election.
Meanwhile, market now seems to have fully priced-in an eventual Fed rate-hike action in June, with a mild up-tick in the US treasury bond yields failing to lend any immediate support to the buck and stall the pair’s ongoing slump.
Later during the day, speeches from various FOMC members would be closely scrutinized for the central bank’s near-term monetary policy outlook and hence, should provide some fresh trading impetus later during the day.
• US: Fed speak will be the predominant driver for risk sentiment – TDS
Technical levels to watch
Immediate support is now pegged near 0.9680 level, below which the downward trajectory seems more likely to get extended towards 0.9640-35 intermediate support en-route 0.9600 handle. On the upside, any recovery attempts now seems to confront immediate resistance near 0.9760-65 region (session tops), above which a bout of short-covering could lift the pair back towards the 0.9800 handle ahead of 0.9825 resistance area.