USD/CHF rebounds after refreshing multi-month lows

The greenback selling pressure remains unabated, with the USD/CHF pair hitting fresh multi-month lows below the 0.9600 handle before recovering few pips.

Growing scepticism over the Trump administration’s ability to push through tax reforms, and pro-growth fiscal stimulus plans, continued weighing on the greenback through European session on Wednesday. In fact, the key US Dollar Index slumped to fresh yearly lows below the 96.00 handle and dragged the pair to its lowest level since the US Presidential election.

However, Tuesday's comments by the Fed Chair Janet Yellen, who reiterated that the central bank would continue to gradually raise interest rates, remained supportive of the ongoing up-move in the US Treasury bond yields and extended some support at lower levels, at least for the time being.

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Meanwhile, traders seemed to have largely ignored the prevalent risk-off environment, which tends to boost the Swiss Franc's safe-haven appeal, with the US bond yield dynamics acting as a key determinant of the pair's movement through early European session on Wednesday. 

Later during the day, central bankers’ comments coming out of a panel discussion at the European Central Bank Forum and the release of pending home sales data from the US would now be looked upon for some fresh impetus.

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Technical levels to watch

Any further recovery now seems to confront immediate resistance near 0.9615-20 region, above which a bout of short-covering could lift the pair back towards 0.9685 horizontal resistance ahead of the 0.9700 handle.

On the downside, a follow through weakness below 0.9580 area (session low) is likely to get extended towards Nov. 9 swing lows support near mid-0.9500s before the pair eventually drops to 0.9520 level (June 2016 low) and the key 0.9500 psychological mark.