USD/CHF flirting with lows, near 0.9800 handle ahead of US data

   •  Persistent USD weakness exerts downward pressure for the second straight session.
   •  The cautious environment provides an additional boost to CHF’s safe-haven appeal.
   •  Bulls trying to defend important MAs confluence support ahead of US data.

The USD/CHF pair maintained it’s heavily offered tone and is currently placed at 3-1/2 week lows, around the 0.9800 handle. 

The pair extended overnight retracement from the 0.9900 handle and remained under intense selling pressure for the second consecutive day on Thursday. Despite a goodish pickup in the US Treasury bond yields, the US Dollar bulls held on the back-foot and kept exerting some downward pressure on the pair.

Adding to this, the prevalent cautious environment around equity markets further underpinned the Swiss Franc's safe-haven appeal and collaborated to the pair's sharp retracement through the mid-European session.

The downfall now seems to have abated, at least for the time being, with the pair finding some support just ahead of the very important 200-day SMA as traders now look forward to the second-tier US economic releases for some fresh impetus.

Hence, traders are likely to wait for a decisive breakthrough important moving averages (200 & 100-day SMA) confluence support near the 0.9785-80 region before positioning for any further near-term downside.

Technical levels to watch

A clear break below the mentioned support is likely to accelerate the fall towards monthly lows support near 0.9735 level before the pair eventually drops to test the 0.9700 handle.

On the upside, any recovery attempts might now confront fresh supply near the 0.9830 region, above which a bout of short-covering could lift the pair towards 0.9860 horizontal resistance ahead of the 0.9900 handle.