The USD/CHF pair continued with its struggle to sustain any recovery move back above the very important 200-day SMA and has now reversed all of its daily gains.
Currently trading around 0.9940-35 band, the pair ran through some fresh offers amid some renewed greenback selling pressure in wake of yet another disappointment from the incoming US economic data. The latest disappointment came from an unexpected drop in personal spending data and lower-than-expected personal income growth.
Moreover, the Core PCE Price Index also indicated easing inflationary pressure, which might now be seen as a key headwind for the Fed rate-tightening cycle. Although the Fed is expected to maintain status-quo on Wednesday, a dovish shift, against the backdrop of disappointing US economic data could aggravate the near-term bearish sentiment surrounding the US Dollar.
Next on tap would the release of US ISM Manufacturing PMI, which would now be looked upon for some immediate respite for the US Dollar bulls.
Technical levels to watch
Immediate support is pegged near 0.9920-15 region, below which the pair is likely to accelerate the slide towards 0.9895-90 horizontal zone (last week’s low) before eventually dropping to test 0.9855-50 support area.
On the flip side, only a sustained move beyond 0.9965-70 area might negate any near-term bearish bias and lift the pair beyond the parity mark towards testing its next hurdle near 1.0020-25 region.