USD/CHF extends recovery from yearly lows, retakes 0.96 mark

The USD/CHF pair built on Friday's recovery move from near 8-month lows and jumped to 3-day tops, above the 0.9600 handle during European trading session on Monday. 

The pair traded with a positive bias for the second consecutive session amid a follow through pick-up in the US Dollar demand, always backed by a continuous rise in the US Treasury bond yields. Broad based greenback recovery has been one of the key factors that seems to have prompted traders to lighten some of their short-positions and driving the pair higher at the start of a new trading week. 

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Meanwhile, the prevalent risk-on environment, which tends to weigh on the Swiss Franc's safe-haven appeal, further collaborated to the pair's recovery move from yearly lows near the 0.9550 area, also marking the lowest level since the US Presidential election touched on Friday.

Looking at the broader picture, the pair's up-move over the past couple of day would still be categorized as corrective from near-term oversold conditions. Hence, traders are likely to wait for a strong follow through buying interest further beyond 0.9620 support break-point, now turned resistance, before committing to any additional near-term recovery for the major. 

Later during the NA session, the release of US ISM manufacturing PMI would now be looked upon for some fresh trading impetus. 

Technical levels to watch

On a sustained move beyond 0.9620 immediate resistance, a fresh bout of short-covering has the potential to lift the pair beyond mid-0.9600s towards its next resistance near 0.9685 level. Alternatively, retracement back below 0.9580 level would turn the pair vulnerable to head back towards retesting multi-month lows support near mid-0.9500s.