USD/CHF remains stuck in tight range above 0.97 post-US data

On Thursday, the USD/CHF pair continues to struggle to set a short-term direction amid a mixed batch of macro data from the United States. After finding support at the 0.97 handle during the European session, the pair has been confined in a 30-pip trading range. As of writing, the pair is trading at 0.9720, down 0.08% on the day.

The data from the U.S. showed that the number of citizens who applied for the unemployment insurance increased to 234,000 from 233,000. The 4-week average, which is considered to be a better indicator due to lower volatility, dropped to its lowest level in more than forty years at 235,250. On the other hand, the trade deficit increased to $68 billion in April from $65 billion in March and missed the market consensus of $64.7 billion. 

• US: Wholesale inventories for April were estimated at $592.0 billion
• US: Weekly initial claims was 234,000, an increase of 1,000 from the previous week

Following the mixed macro data, the US Dollar Index continues to float above the 97 handle and is making it difficult for the pair to gather a bearish momentum. Furthermore, the major equity indexes in the U.S. started the day higher, suggesting an improving market sentiment, which hurts the demand for the safe haven CHF. As of writing, both the Dow Jones Industrial Average and the S&P 500 Index were up 0.3%. The next catalyst for the pair could come at the top of the hour when Lael Brainard, a member of the Fed’s Board of Governors, is scheduled to give a speech.

• US stocks open higher for sixth consecutive session, S&P and Nasdaq hit fresh record highs

Technical outlook

The immediate support for the pair could be seen at 0.9700 (psychological level/daily low) ahead of 0.9640 (Sept. 29 low) and 0.9600 (psychological level). On the upside, resistances align at 0.9775 (May 24 high), 0.9850 (May 17 high) and 0.9900 (psychological level).