USD/CHF extends corrective slide, drops to session low at 1.0125

The USD/CHF pair extended its profit taking slide from multi-month highs and dropped to a two day low amid broad based greenback retracement.

Currently trading around 1.0125 region, the pair reversed from 1.0200 neighborhood as the post-US presidential election strong US Dollar rally, led by aggressive fiscal stimulus hopes by Trump administration, appeared pausing for a breather. Moreover, investors also seemed to cash in some gains following the pair recent up-surge of nearly 650-pips from monthly lows near mid-0.9500s, touched on November 9.

Today's US economic calendar features only second-tier macro data - Goods Trade Balance, Prelim Wholesale Inventories and Markit's Flash Services PMI, and seems unlikely to provide any impetus during NA session. 

Meanwhile, US fiscal stimulus is expected to boost inflation and eventually lead to faster pace of rate increased by Federal Reserve, which might continue to underpin the US Dollar and limit any sharp corrective slide for the major. 

Technical outlook

Yann Quelenn, Market Analyst at Swissquote Bank SA, notes, "In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015."