USD/CHF extends recovery beyond 0.95 handle

The USD/CHF pair caught some fresh bids at the start of a new trading week and has now recovered all of its Friday's sharp losses to over two-year lows.

Currently trading just above the key 0.95 psychological mark, the pair's strong recovery move through early European session was being supported by a modest pickup in the greenback demand. 

Renewed optimism over the US President Donald Trump's pro-growth economic agenda, especially after his comments on Saturday, urging to speed up efforts to overhaul the US tax code, helped the US Dollar Index to stage a goodish recovery from over 2-1/2 year lows touched on Friday. 

Meanwhile, the fact that were no further developments in the N. Korean crisis over the weekend further dented the Swiss Franc's safe-haven appeal and collaborated to the strong bid tone surrounding the major. 

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It, however, remains to be seen if the up-move is backed by any genuine buying or is solely led by short-covering amid fading prospects over any additional Fed rate hike action by the end of this year. 

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This week's important US macro data, including the latest inflation figures and monthly retail sales data, would now be looked upon for possibilities and timing of the next rate hike move and would eventually help determine the pair's next leg of directional move. 

Technical levels to watch

A follow through buying interest has the potential to continue lifting the pair towards 0.9525-30 resistance area en-route 0.9555-60 horizontal resistance.

On the flip side, 0.9485 level now seems to protect immediate downside, which if broken might drag the pair back towards 0.9440-35 support ahead of the 0.9420 level (Friday's low) and the 0.9400 handle.