USD/CHF eases to session lows despite robust US data

After making a modest recovery attempt during the Asian session to 0.9560 mark, the USD/CHF pair came under pressure in the European trading hours as the risk appetite struggled to pick up, keeping the demand for safe havens alive. As of writing, the pair was trading at 0.9530, losing 0.15% on the day.

Compared to yesterday's 100-pip loss, today's retreat is not significant enough to assume that the pair is on the verge of breaking below the critical 0.9500 level. Moreover, the US Dollar Index continues to hold on to its small daily gains, providing support for the pair. Today's  only data from the U.S. showed that the Building Permits increased by 7.4% on a monthly basis in June after contracting 4.9% in the previous month and Housing Starts advanced by 8.3%, beating the market expectation of 6.2%. Although there was no apperent USD positive market reaction to the data, the US Dollar Index is at 95.50, up 0.04% on the day.

If major equity indexes in the U.S. gather momentum on Wednesday, the pair could find some additional boost to take back its daily losses as well. European equity indexes are recording some small gains at the moment, suggesting that Wall Street could have a positive start to the day.

Technical outlook

A daily close below the 0.9500 (psychological level) handle could open the door for further losses. 0.9440 (May 3, 2016, low) could be seen as the first technical support ahead of 0.9400 (psychological level). On the upside, resistances align at 0.9615 (20-DMA), 0.9700 (psychological level/Jul. 14 high) and 0.9820 (100-DMA). 

• USD/CHF negative near term – Commerzbank