USD/CHF’s recovery from 0.9840 stalls below 0.9900

• US dollar's rebound meets resistance right above 0.9900.
• The greenback trims losses following a two-day sell-off.
• USD/CHF: Below 0.9876, the near-term risk turns negative – Credit Suisse. 

The US dollar is attempting to pare losses on Thursday after the sharp reversal witnessed in the previous two days. The pair bounced up from three-week lows at 0.9840, has stalled below 0.9900 after hitting session highs at 0.9925.

The US dollar picks up amid upbeat US data

Data released by the Commerce Department revealed an unexpected rebound in the US economy. US Gross Domestic Product expanded at a 2.6% annual pace in the third quarter, beating expectations of a 2.4% growth and reversing two consecutive contractions in the previous quarters.

On the negative side, however, domestic demand has shown its weakest performance in two years, confirming the negative impact of the sharpest monetary tightening cycle of the latest 40 years.

US stock markets jumped into the green following the data, although they are mixed at the time of writing, with the Dow Jones 1.2% higher the S&P Index practically flat, and the Nasdaq 0.8% down.

US Treasury yields have continued their pullback, with the benchmark 10-year bond trading at 3.9%, down from levels near 4.3% earlier this week.

USD/CHF: Breach of 0.9876 shifts the near-term risk lower – Credit Suisse

FX analysts at Credit Suisse warn about a bearish move past 0.9876, which might pull the pair to the 0.9775 area: “USD/CHF has managed to break below 0.9876. This signals that further near-term weakness is likely to follow. With near-term MACD also reinforcing this bearish signal, we look for a fall to 0.9838/30 initially and then likely for a test of the 55-DMA at 0.9775.” 

Technical levels to watch