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USD/CHF retreats from multi-day top as US Dollar bulls run out of steam.
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US Treasury bonds underpinned the bullish bias by refreshing multi-day highs before easing from recent peaks.
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Mixed Fed talks, US data probe pair buyers as the key PMI figures loom.
USD/CHF remains sidelined around 0.9420 during early Friday, after retreating from the Year-To-Date (YTD) high before a few hours. That said, the Swiss currency pair rose to the three-month high the previous day amid broad-based US Dollar run-up but mixed comments from the Fed officials joined unimpressive US data to challenge the bulls afterward. Also challenging the quote could be the cautious mood ahead of the key US ISM Services PMI for February.
Comments by Federal Reserve Bank of Atlanta President Raphael Bostick challenged the market’s hawkish Federal Reserve (Fed) bias as policymakers said the central bank could be in a position to halt the current tightening cycle by mid-to-late summer. On the other hand, Boston Fed President Susan Collins said on Thursday that more rate hikes are needed to keep inflation under control. He added that the amount of interest rate hike will be determined by incoming data.
Talking about the US data, the US Jobless Claims dropped to 190K during the week ended on February 24 versus 195K market forecasts and 192K prior. Further, Nonfarm Productivity for the fourth quarter (Q4) eased to 1.7% from 3.0% prior and 2.6% market forecasts while the Unit Labor Costs jumped 3.6% versus 1.6% analysts’ estimations and 1.1% previous readings.
Elsewhere, the US-China tension at the Group of 20 Nations (G20) meeting, amid the former’s push for sanctions on countries having strong ties with Russia and aiding Moscow in war with Ukraine, previously probed the sentiment. However, the dovish Fed comments and chatters of the Sino-American trade talks seemed to have triggered a risk-on mood afterward.
Amid these plays, Wall Street closed on the positive side, after a downbeat start, whereas the S&P 500 Futures printed mild losses by the press time. Further, US 10-year Treasury bond yields rose to a fresh high since early November 2022 while piercing the 4.0% threshold whereas the two-year counterpart rallied to the highest levels since 2007 to 4.94%. However, the bond coupons have retreated from their multi-month high of late.
Moving on, USD/CHF traders should pay attention to the US ISM Services PMI for February, expected 54.5 versus 55.2 prior readouts.
Also read: ISM Services PMI Preview: Strong figure set to catapult US Dollar to new highs
Technical analysis
As the higher high of the USD/CHF price fails to gain support from the higher high of the RSI (14) line, the Swiss currency pair’s further upside appears doubtful. Further, the 100-DMA hurdle surrounding 0.9435 adds to the upside filters for the pair traders to watch.
ADDITIONAL IMPORTANT LEVELS
