USD/CHF sticks to recovery gains, just below 0.97 handle post US data

A broad based greenback recovery helped the USD/CHF pair to regain traction and move back closer to the 0.9700 handle. The pair, however, failed to extend the up-move beyond the 0.9700 handle and had a muted reaction to the US economic data.

The pair held on some gains around 0.9675-80 region after data released from the US showed initial jobless claims for the week ended August 14 fell more than expected to 232K, down from previous week’s 244K and 240K expected. 

Meanwhile, Philly Fed manufacturing index retreated for the third consecutive month and dropped to a 9-month low level of 18.9 in August, but was still better than 18.5 expected. 

Earlier on Thursday, the pair extended overnight slide, led by perceived dovish FOMC minutes and touched a multi-day low near 0.9625 area. The USD dip demand has re-emerged since early European session, with the key US Dollar Index recovering majority of the post-minutes slide and helping the pair to recover over 75-pips from session lows. 

The up-move, however, lacked any strong follow through momentum amid prevalent cautious environment, which was seen lending support to the Swiss Franc's safe-haven appeal and collaborated towards keeping a lid on pair's recovery move.

Technical levels to watch

A strong follow through buying interest beyond the 0.9700 mark has the potential to lift the pair towards 0.9735-40 hurdle en-route an important hurdle near the 0.9775 region, also coinciding with 100-day SMA. On the flip side, bears would be targeting for a decisive break through 0.9625-20 support area, below which the pair might turn vulnerable to weaken below the 0.9600 handle towards testing its next support near the 0.9555-50 region.