USD/CHF retreats below 0.9150 after three-day rally

• USD/CHF turns south after renewing weekly highs on Wednesday.
• The CHF seems to be capitalizing on cautious market mood on Thursday.
• US Dollar Index stays below 93.00 ahead of inflation data.

The USD/CHF pair closed the first three days of the week in the positive territory and gained nearly 200 pips during that rally. However, the pair lost its momentum after touching a weekly high of 0.9194 on Wednesday and started to consolidate its gains on Thursday. As of writing, USD/CHF was down 0.35% on the day at 0.9143.

DXY stays below 93.00 ahead of inflation data

The cautious market mood, as reflected by falling European equity indexes, seems to be helping USD/CHF stage a correction. Following the risk rally that was triggered by coronavirus vaccine optimism earlier in the week, investors seem to have shifted their focus the surging number of COVID-19 cases in Europe. At the moment, the Euro Stoxx 50 and Germany's DAX 30 indexes are down 0.4% and 0.77%, respectively.

Later in the day, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) figures for October alongside the US Department of Labor's weekly Initial Jobless Claims report.

Ahead of these data, the US Dollar Index (DXY) is down 0.18% on the day at 92.82. Meanwhile, the 10-year US Treasury bond yield, which gained nearly 20% during the first half of the week, is down 0.4% on Thursday, making it tough for the greenback to preserve its strength against its rivals. 

Technical levels to watch for