USD/CHF plummets to 0.99 handle as USD sinks to 6-month lows

The USD/CHF pair extended last week's sharp reversal move from the 1.0100 handle and tumbled to 6-day lows near the 0.9900 mark amid persistent greenback selling pressure. 

Against the backdrop of recent US macro data disappointment, which seems to have dampened prospects for additional Fed rate-hike action through 2017, the greenback remained under increasing selling pressure since Friday. In fact, the key US Dollar Index plunged to six-month lows on Tuesday and has been the key factor collaborating to the pair's downslide for the fourth consecutive session.

Traders even shrugged off a modest recovery in the US treasury bond yields, with the prevalent strong bearish sentiment surrounding the buck turning out to be an exclusive driver of the pair's sharp downslide of around 200-pips from near one month high touched last Thursday. 

Bulls would now try to defend the 0.9900 handle, which if broken might trigger some fresh stops and aggravate the selling pressure as focus shifts to today's US economic docket, featuring the release of housing starts, building permits and industrial production data. 

Technical levels to watch

On a sustained break below the 0.9900 mark, the pair is likely to accelerate the slide towards 0.9865-60 support area before eventually breaking below the 0.9800 handle to test its next support near 0.9780-75 region. On the flip side, any recovery attempts beyond 0.9915-20 immediate hurdle now seems to confront strong supply near 0.9960 level, above which a bout of short-covering could lift the pair back above the parity mark.