USD/CHF struggles near weekly lows, below mid-0.9000s ahead of US data

• USD/CHF met with some fresh supply on Friday amid sustained selling around the USD.
• The risk-on mood, surging US bond yields failed to impress bulls or extend any support.
• Investors now eye second-tier US economic data for some short-term trading impetus.

The USD/CHF pair maintained its offered tone through the mid-European session and was last seen hovering near the lower end of its daily trading range, around the 0.9030 region.

Following the previous day's good two-way price moves, the pair came under some renewed selling pressure on Friday and broke through a one-week-old consolidative range. The heavily offered tone surrounding the US dollar was seen as one of the key factors that dragged the pair back closer to multi-year lows set earlier this August.

The Fed Chair Jerome Powell, in his keynote speech at the Jackson Hole Symposium, said that the Fed is willing to allow inflation to overshoot the 2% target for some time in order to compensate years of undershooting. The comments raised speculations that the Fed could keep rates lower for longer, which, in turn, weighed heavily on the greenback.

Meanwhile, the USD bulls seemed rather unimpressed and failed to gain any respite from a strong pickup in the US Treasury bond yields. Even the prevalent risk-on mood, which tends to undermine the Swiss franc's safe-haven demand, did little to extended any support, albeit might turn out to be the only factor that might help limit the downside for the major.

Hence, any subsequent fall might continue to attract some dip-buying near the key 0.9000 psychological mark. This makes it prudent to wait for some strong follow-through selling below the mentioned support before positioning for any further near-term depreciating move.

Market participants now look forward to the second-tier US data for some impetus on the last day of the week. The US economic docket features the release of the Core PCE Price Index, Chicago PMI and Revised Michigan Consumer Sentiment Index.

Technical levels to watch