USD/CHF surrenders early gains to over 2-month tops

   •  Fails to capitalize on early up-move, despite supportive factors.
   •  Traders prompted to take some profits off the table.

The USD/CHF pair surrendered early gains to over 2-month tops and has now drifted into negative territory, at risk of breaking back below the 0.9600 handle. 

The pair on Wednesday rebounded from an intraday low level of 0.9551 and finally break through the 0.9600 handle to the highest since Jan. 23. A strong recovery in investors’ appetite for riskier assets, as depicted by a sharp overnight rebound in the US equity markets amid easing US-China trade-war fears, was seen as one of the key factors behind the pair's strong up-move.

The spill-over effect across Asian/European bourses on Thursday continued denting the Swiss Franc's safe-haven appeal. This coupled with a goodish pickup in the US Dollar demand provided an additional boost and assisted the pair to move beyond 100-day SMA hurdle for the first time since Jan. 11. 

The pair, however, now seems to have lost some upside momentum, despite a bunch of supporting factors. The retracement lacked any obvious catalyst and could be solely attributed to some profit-taking, especially after the recent gains of over 100-pips since the beginning of this year.

On the economic data front, the release of usual weekly initial jobless claims data would now be looked upon for some short-term trading impetus. The key focus, however, would remain on Friday's official monthly jobs report, which might help investors determine the next leg of directional move.

Technical levels to watch

Any meaningful retracement below the 0.9600 handle is likely to find some support near the 0.9560 horizontal level, which if broken might prompt some additional weakness towards 0.9525 level en-route the key 0.95 psychological mark. 

On the flip side, momentum back above 0.9620 level now seems to lift the pair further towards testing the very important 200-day SMA hurdle near the 0.9655 region.