USD/CHF retreats back closer to 17-month lows, 0.93 handle back on sight

The USD/CHF pair came under some fresh selling pressure on Tuesday and dropped back closer to last week’s near 17-month lows, albeit has managed to find some support ahead of the 0.9300 handle.

The pair stalled its modest recovery move ahead of the 0.9400 handle and has now erased all of the previous session's modest recovery gains amid renewed US Dollar weakness, led by a sharp retracement in the US Treasury bond yields. 

Meanwhile, a fresh wave of global risk-aversion trade provided an additional boost to the Swiss Franc's safe-haven appeal and further collaborated to the pair's slide through the mid-European session.

Even today's weaker than expected KOF economic barometer, predicting the direction of the Swiss economy over the next 6 months, passed largely unnoticed, with the resumption of USD bearish fall acting as an exclusive driver of the pair's weaker tone on Tuesday.

Moving ahead, the CB's Consumer Confidence Index, the only scheduled release from today's US economic docket, would now be looked upon for some short-term trading impetus. 

Investors will also scrutinize the US President Donald Trump's first official State of the Union address and the highly anticipated FOMC decision before positioning for the pair's near trajectory.

Technical levels to watch

Bears would be eyeing for a convincing break through the 0.9300 handle, below which the pair is likely to accelerate the fall towards August 2015 lows support near the 0.9260-55 region.

On the upside, immediate support is pegged near 0.9375 level and is closely followed by the 0.9400 handle, which if cleared might trigger a short-covering bounce towards the 0.9440-45 region.