USD/CHF reverses Wednesday’s losses, 200-DMA support held

The USD/CHF pair built on overnight bounce back above the very important 200-day SMA and has now reversed all of its previous session's losses to fresh multi-week lows.

Currently trading around 0.9940 region, testing session peaks, the pair gained some traction on Thursday in wake of slight improvement in investors' risk-appetite, which tends to drive flows away from traditional safe-haven assets - like the Swiss Franc.

This coupled with a modest recovery in the US treasury bond yields supported a mild greenback recovery, with the key US Dollar Index bouncing off multi-week lows, further collaborated to the pair's recovery move from the lowest level since early Feb. near 0.9880 region touched in the previous session. 

In absence of any fundamental drivers, in-terms of market moving economic releases, the pair's recovery move on Thursday could be attributed to some short-covering as investors seems to lighten their positions ahead of a key vote on Trump's healthcare, bill later during the day.

Also the key speeches from the Fed Chair Janet Yellen and Minneapolis Fed President Neel Kashkari might also infuse volatility in the FX market. Today's US economic docket features the release of usual weekly jobless claims and new home sales data, which would be looked upon to grab some short-term trading opportunities.

Technical levels to watch

A follow through buying interest has the potential to lift the pair towards 0.9980-85 region, above which a fresh bout of short-covering should continue boosting its towards 1.0025-30 resistance ahead of 100-day SMA strong hurdle near 1.0060 region.

On the flip side, renewed weakness back below the 200-day SMA support near 0.9915 region would turn the pair vulnerable to break below 0.9880 level (yesterday's low) and head towards testing 0.9820-15 support.