USD/CHF reverses majority of Monday’s losses to reclaim parity

The USD/CHF pair caught some bids at lower level and staged a goodish recovery, reversing majority of its losses recorded in the previous session.

Currently hovering around parity mark, broad based US Dollar recovery extended through European trading session on Tuesday and has been the exclusive driver of the pair's recovery from the lowest level since mid-Nov. 

The recovery, however, lacked momentum as concerns over the US President Donald Trump’s protectionist stance and uncertainty over his economic policies continued to weigh on investor sentiment. 

From technical perspective, the pair has rebounded from 100-day SMA support area and hence, the current leg of recovery could also be attributed to some near-term short-covering amid slight improvement in investor risk appetite, which tends to drive flows away from traditional safe-haven currencies, including the Swiss Franc. 

Tuesday's US economic docket, featuring the release of flash manufacturing PMI and existing home sales data would now be looked upon for fresh trading impetus during early NA session.

Technical levels to watch

A follow through buying interest above 1.0020 level is likely to accelerate the recovery move towards 1.0050 area before the pair eventually aims towards reclaiming 1.0100 handle. On the downside, 100-day SMA near 0.9970 region remains immediate support to defend, which if broken seems to drag the pair immediately towards 0.9945 support area, en-route its next major support near 0.9900 round figure mark.