USD/CHF surrenders majority of early strong gains

A fresh wave of greenback selling interest emerged during early NA session, with the USD/CHF pair retreating over 50-pips from session tops to currently trade around 0.9565-60 region.

The US Dollar surrendered all of its early gains closer to the 95.00 handle and the reversal was primarily driven by a sharp uptick in the shared currency following hawkish remarks by the ECB President Mario Draghi. The spillover effect contributed towards stalling the pair's ongoing recovery move from one-year lows.

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Meanwhile, the market seems to have largely ignored a larger-than-expected drop in the weekly jobless claims data from the US, which to some extent seems to have been negated by disappointing Philly Fed manufacturing index.

It would now be interesting to see if the pair is able to defend an immediate support near mid-0.9500s amid prevalent risk-on environment, which tends to dent the Swiss Franc's safe-haven appeal.

Reemergence of selling pressure on any meaningful recovery attempts clearly seems to suggest that the pair's near-term downward trajectory could still be far from over. 

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Technical levels to watch

Weakness below mid-0.9500s could get extended towards yearly lows support near 0.9530-25 region before the pair eventually drops to the key 0.95 psychological mark. On the flip side, sustained recovery back above the 0.9600 handle might now trigger a short-covering rally towards 0.9655 intermediate resistance ahead of the next major hurdle near 0.9675-80 region.