USD/CHF clings to gains near mid-0.9600s

After yesterday's sharp reversal from over one-week highs, the USD/CHF pair regained traction and held with positive bias through early European session on Thursday.

The pair extended its recent recovery move from near 10-month lows touched last Friday and inched up despite a subdued US Dollar price action amid absent hawkish surprise from Wednesday's FOMC meeting minutes. However, a modest uptick in the US Treasury bond yields was seen lending some support to the pair's up-move on Thursday.

Meanwhile, the CHF was being weighed down by today's disappointing Swiss inflation figures, with the headline CPI falling 0.1% m-o-m in June as against a flat reading expected and 0.2% rise recorded in May. Adding to this, some signs of stability in European equity markets further dented the Swiss Franc's safe-haven appeal and also collaborated to the bid tone surrounding the major.

Investors now look forward to the US economic docket, featuring the release of trade balance data, ISM non-manufacturing PMI and more importantly ADP report, which would drive expectations for Friday's official jobs data (NFP) and eventually provide some fresh impetus.

Technical levels to watch

Immediate resistance remains near 0.9680-85 region, above which the pair is likely to head towards 0.9725 horizontal resistance en-route its next major hurdle near mid-0.9700s.

On the downside, the 0.9640-35 region now seems to act as immediate support, which if broken is likely to accelerate the slide towards the 0.9600 handle en-route 0.9585 strong horizontal support.