USD/CHF turns flat but holds 50-DMA, US data eyed for direction

The USD/CHF pair erased its early European session gains to 0.9743 and has now turned back to 50-day SMA support near 0.9700 handle.

Following Thursday's sharp reversal from 0.9663 after hawkish comments from three voting members of the Fed’s interest-rate setting committee, the pair extended its up-move during the early part of the last trading session of the week. The US Dollar, however, now seems to face some selling pressure at higher levels just ahead of some important macro releases from the US. Important data slated for release on Friday includes, retail sales data, PPI and the preliminary reading of UoM consumer sentiment index.

Friday's releases are unlikely to change Fed rate-hike expectations, but traders seems to position themselves for a short-term trading spike on either direction. Even from technical perspective, the pair has repeatedly failed to build on to its momentum above 50-day SMA. Hence, a follow through selling pressure might force the pair to test lower levels.

Technical levels to watch

On the immediate downside, traders will keep a close watch on 20-day SMA support near 0.9680 region, which if broken might accelerate the fall towards 0.9660-50 horizontal support and the fall could further get extended towards 0.9590-85 support area.

On the flip side, bounce off 50-day SMA support and a subsequent strength above day's peak resistance near 0.9745-50 area should assist the pair to reclaim 0.9800 handle, marking its highest level in eight-weeks.