USD/CHF slides towards 0.9250 as markets pare recent moves ahead of Fed Chair Powell’s speech

• USD/CHF holds lower grounds near intraday low bottom, snaps three-day winning streak.
• US Dollar retreats as yields struggle amid mixed clues, light calendar and cautious mood.
• Swiss Unemployment Rate, Fed’s Powell and US President Biden’s SOTU eyed for fresh impulse.

USD/CHF clings to mild losses around 0.9265, after a three-day uptrend, as the US Dollar consolidates amid sluggish markets.

Adding strength to the Swiss Franc (CHF) pair’s pullback could be the cautious optimism in the market, as well as a light calendar. It’s worth mentioning that the anxiety ahead of a speech from Federal Reserve Chairman Jerome Powell and US President Joe Biden’s State of the Union (SOTU) comments also weigh on the quote of late. In doing so, the USD/CHF price retreats from the highest levels in three weeks.

That said, the US Dollar Index (DXY) traces sluggish yields to ease from a one-month high, down 0.18% intraday near 103.45 by the press time.

It’s worth noting that the growth optimism conveyed by US Treasury Secretary Janet Yellen and President Joe Biden seemed to have probed the US Dollar bulls. On the same line were the comments from US President Joe Bide which appear to placate the matter by saying, “The balloon incident does not weaken US-China relations.”

Even so, hawkish Fed talks seem to put a floor under the US Treasury bond yields, as well as the US Dollar. “The strong labor market probably means ‘we have to do a little more work,’” said Federal Reserve Bank of Atlanta President Raphel Bostic in an interview with Bloomberg. It’s worth noting that the firmer US jobs report and activity data for January renewed hawkish Fed bias the last Friday but a lack of directives seem to probe the greenback bulls afterward.

As a result, today’s speech from Fed Chair Powell will be closely observed as the US central bank appeared dovish in its latest monetary policy meeting and drowned the USD. Also important will be how well US President Biden is prepared to propel the world’s biggest economy amid looming recession fears.

Other than the stated speeches, the Swiss Unemployment Rate for January, expected to ease to 1.8% from 1.9%, will also be important for the USD/CHF pair traders to watch for clear directions.

Technical analysis

An 11-week-old descending resistance line, around 0.9285 by the press time, restricts short-term USD/CHF advances. The downside moves, however, will need validation from the 21-DMA support of 0.9218 to recall the pair sellers.