USD/CHF consolidates gains above parity

After gaining more than 200 pips in the first two trading days of the week, the USD/CHF pair is taking a break on Wednesday as it wavers in a tight 30-pip range. As of writing, the pair was trading at 1.0068, losing only 6 pips on the day.

The pair rose to its one-month high at 1.0090 on Tuesday amid a sustained greenback strength but eased back to 1.0066 at the end of the day. Rising tensions between the United States and North Korea brought a late risk aversion last night and helped the CHF retrace some of its losses as it was able to find some demand as a safe haven. 

Furthermore, after rising to its best level in two weeks at 99.56, the US Dollar Index went into a consolidation phase on Wednesday as well and is now at 99.50, down 0.05% on the day. Today's data from the Unites States showed that the import and export price indexes both rose more than expected but the market didn't show an obvious reaction. Boston Fed President Rosengren's speech later in the session could be the next catalyst for the pair. Apart from that, the calendar won't be offering any data.

• US: Import prices advance 0.5% in April, up 0.3% excluding fuel; export prices up 0.2%

Technical outlook

1.0090 (May 9 high) could be seen as the initial hurdle for the pair ahead of 1.0110 (Apr. 10 high) and 1.0160 (Mar. 9 high). To the downside, supports align at 1.0000 (psychological level), 0.9950 (20-DMA) and 0.9860 (May 4 low).

• USD/CHF focus is now on 1.0140 – Commerzbank