USD/CHF eases towards 0.97 on dismal US data

After reaching its session high at 0.9740, the USD/CHF came under a renewed selling pressure in the early NA session following some disappointing data from the United States. As of writing the pair is testing the 0.97 handle and is flat on the day.

Today's data from the U.S. showed that new orders for manufactured durable goods decreased 1.1% in May following a 0.8% contraction in April and missed the market expectation of -0.6%. Moreover, the Chicago Fed National Activity Index fell to -0.26 in May from 0.57 in April. Further details of this data showed that both the employment and personal consumption sub-indexes dropped into the negative territory.

• US: Chicago Fed National Activity Index was –0.26 in May, down from +0.57 in April
• US: New orders for manufactured durable goods in May decreased $2.5 billion

Pressured by the weak data, the greenback started to erase its daily earnings against its competitors, pushing the US Dollar Index back below the 97 handle. At the moment, the index is at 97.85, down 0.13% on the day. In the meantime, major equity indexes in the U.S. had a mixed start to the day, keeping the demand for safer assets like the CHF alive.

Technical outlook

The 20-DMA near the 0.97 handle is acting as a dynamic support for the pair. A daily close below that level could open the door to 0.9640 (Jun. 14 low), 0.9610 (Jun. 6 low) and 0.9500 (psychological level). To the upside, resistances could be seen at 0.9740 (daily high), 0.9775 ( the upper arm of the daily Bollinger Band) and 0.9850 (May 17 high).

• USD/CHF potential upside to 0.9800/55 band – Commerzbank