USD/CHF clings to gains near 0.9835

The USD/CHF pair maintained its strong bid tone and held on to its gains to 8-day high level to currently trade around 0.9835 region.

The pair ignored an unexpected decline in the US nonfarm productivity for a third straight quarter and held on to its gains for fifth straight session. According to the a report released by the US Labor Department on Tuesday, output per hour during the the second quarter of 2016 decreased at a 0.5% annualized rate after recording a drop of 0.6% in the previous quarter. 

Meanwhile, the Swiss Franc remained under selling pressure after Monday's data showed deflationary pressure making a come-back, with CPI for July dropping back below 0.0% to -0.4%, its lowest level since Jan. Although the reading was slightly better-than -0.5% expected but might now fuel further monetary easing by SNB and is supporting the USD/CHF pair’s near-term upward trajectory. 

Technical outlook

Yann Quelenn, Market Analyst at Swissquote Bank SA, notes, "USD/CHF continues to bounce from hourly support given at 0.9634 (02/08/2016 low) while strong resistance is given at 9956 (30/05/2016 high). Volatility is very low and should indicate that this short-term bullish momentum is at stake."

"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."