USD/CHF takes back portion of daily losses, remains below 0.97

The USD/CHF pair plummeted to a fresh 10-day low at 0.9610 on Wednesday as the increased safe-haven demand due to rising geopolitical concerns allowed the CHF to gather strength against its peers. However, the pair reversed course in the early NA session and started to retrace its losses. As of writing, the pair was trading at 0.9667, losing 0.8% on the day.

Today's macro data from the U.S. triggered another USD buying wave, weakening the impact of the low risk-appetite on the price action. Similar to yesterday, investors were eager to buy more US dollars and took the opportunity to do so after the U.S. Bureau of Labor Statistics announced that the nonfarm business sector labor productivity increased 0.9% during the second quarter of 2017, surpassing the market expectations of 0.7%. On the other hand, unit labor costs rose 0.6% in the second quarter of 2017. Although this data came in below the market consensus of 1.2%, the fact that the first quarter reading was revised up to 5.4% from 2.2% neutralized any potential adverse effects on the buck.

• US: Productivity rises 0.9% in 2nd quarter 2017; unit labor costs rise 0.6%

With no more data left in the day, investors will be watching the developments around North Korea. 1The bellicose rhetoric from the US and North Korean officials is the primary driver today. We would qualify that assessment by noting that first, the market moves are rather modest, suggesting a low-level anxiety among investors. Second, that the pre-existing trends have mostly been extended," argue analysts at BBH.

• US and North Korean aggression is the main driver today - BBH

Technical outlook

A daily close below the 0.97 handle could allow another attempt at 0.9615/10 (20-DMA/daily low) ahead of 0.9550 (Jun. 29 low) and 0.9500 (psychological level). On the flip side, 0.9700 (psychological level/former support) aligns as the initial resistance before 0.9765 (Jun. 20 high) and 0.9810 (May 30 high).