USD/CHF stays flat below 0.9000 as focus shifts to US data

• USD/CHF is trading in a narrow band on Thursday.
• US Dollar Index stays near 90.00 following Wednesday's rebound.
• Focus shifts to high-tier macroeconomic data releases from US. 

After dropping to a multi-month low of 0.8930 on Tuesday, the USD/CHF pair staged a rebound and closed in the positive territory on Wednesday. However, the pair lost its recovery momentum near 0.9000 and went into a consolidation phase. As of writing, USD/CHF was virtually unchanged on the day at 0.8980.

On Wednesday, the USD gathered strength against its rivals on the back of recovering US Treasury bond yields. With the benchmark 10-year US T-bond yield snapping a four-day losing streak and rising 1.5%, the US Dollar Index (DXY) gained 0.4%. Ahead of key macroeconomic data releases from the US, the DXY stays relatively quiet around 90.00.

Later in the session, the US Bureau of Economic Analysis will release the second estimate of the annualized first-quarter GDP growth, which is expected to show the economy expanded by 6.5%. Additionally, April Durable Goods Orders and the weekly Initial Jobless Claims data will be featured in the US economic docket as well.

USD/CHF outlook

Credit Suisse analysts think USD/CHF is likely to extend its slide after breaking below the critical 200-day SMA. 

"We maintain our downside bias following the recent break below the 200-day average, which suggested the medium term downtrend was resuming," analysts explained. "With this in mind, we look for a renewed turn back lower, with next support seen at .8922/10, which is the 78.6% retracement of the Q1 recovery, before .8871/62, which is an important price low.” 

On the flip side, analysts see the initial resistance area at 0.9049/53 ahead of 0.9077, where the 200-day SMA is located.

Additional levels to watch for