USD/CHF eases back from fresh monthly highs around 1.01

The USD/CHF pair leaped to 1.0098 in the European noon and renewed its monthly high as the greenback gathered a bullish momentum following the BoE decision and Carney comments. After the initial spike, the pair eased back a little but was able to find support at 1.0080. As of writing, the pair was trading flat on the day at 1.0090.

BoE Governor Carney disregarded the rise in the inflation rate and reiterated that the current monetary policy was appropriate, triggering a heavy cable sell off. Although the inverse correlation between the USD/CHF and the GBP/USD pairs are usually not that strong, the fact that the US Dollar Index rose to its best level since April 21 following Carney's remarks allowed the USD/CHF to extend its gains. Furthermore, today's macro data from the United States came in above expectations, providing an additional boost for the USD. 

• US: Weekly initial claims was 236,000, a decrease of 2,000 from the previous week
• US: PPI for final demand advances 0.5% in April; services increase 0.4%, goods rise 0.5%

Despite that latest upsurge, the pair remains in a 30-pip narrow range on Thursday. Major equity indexes in the U.S. opened slightly lower, capping the gains in the pair as the weak risk appetite is giving a hand to the safe haven CHF for the time being. The economic calendar doesn't feature any data from Switzerland on Friday. The CPI and GDP figures from Germany could be the next catalyst for the pair. However, the greenback has been the primary driver of the price action, and it's likely to stay that way until the end of the week.

Technical outlook

The pair faces the immediate resistance at 1.0110 (Apr. 10 high) ahead of 1.0160 (Mar. 9 high) and 1.0200 (psychological level). On the flip side, supports align at 1.0010 (100-DMA), 0.9960 (20-DMA) and 0.9860 (May 4 low).