USD/CHF consolidates losses as US yields recover

• The USD/CHF saw mild losses near 0.8970 after Friday’s sharp declines.
• The US bond yields are recovering from multi-week lows.
• Eyes on Fed speakers.

The USD/CHF was seen mostly flat on Monday, with the pair trading around 0.8970. The pair's price dynamics were set by rising US bond yields, which benefited the Greenback, allowing it to gain traction which limits the downside for the pair. For the rest of the session, no relevant data will be released for either the US or Switzerland.

The US Dollar is gaining momentum on Monday after sharply declining last week amid dovish bets on the Federal Reserve (Fed) after Wednesday’s decision. The bank decided to hold rates steady at 5.25-5.50%, and Chair Powell was seen hinting at the monetary policy reaching its end. As a reaction, the US Treasuries sharply declined, which favoured the downward trajectory of the pair. The downside was exacerbated by soft labor market data released on Friday, which included reports of the US job creation decelerating in October and the Unemployment rate rising.

On Monday, the 2,5 and 10-year rates recovered from multi-week lows, jumping to 4.90%, 4.58% and 4.64%, respectively, which provided a lift to the US Dollar. For the rest of the week, the focus will be on several Fed officials, who will be on the wires for investors to continue placing their bets on the next decisions. As for now, the CME FedWatch tool suggests that the odds of a 25 bps hike declined nearly 10% for the upcoming December meeting. Chair Powell speaks on Wednesday.

USD/CHF Levels to watch

Analysing the daily chart, the technical outlook for the USD/CHF remains neutral to bearish as the bears continue to show signs of gaining ground for the short term. Displaying a slight negative slope in the bearish region, the Relative Strength Index (RSI) indicates a potential continuation of bearish momentum while the Moving Average Convergence (MACD) histogram presents lower green bars.  Additionally, the pair is below the 20 and 200-day Simple Moving Average (SMA), but above the 100 SMA, indicating that the buyers are still holding momentum on the bigger picture, holding their some dominance over the sellers.

Supports: 0.8960, 0.8950, 0.8930
Resistances: 0.9000 (20 and 200-day SMA convergence), 0.9020, 0.9040

USD/CHF Levels to watch