USD/CHF struggles to pull away from session lows on risk aversion

Although the USD/CHF pair was able to make a mild 30-pip recovery from its session lows in the first hour of the American session, it failed to gather any further momentum as the risk appetite remains absent in the markets. As of writing, the pair is trading at 0.9754, 10 pips above its session low, losing 0.25% on the day.

Earlier in the day, KOF Leading Indicator from Switzerland fell to 101.6 in May from 106.3 in April and missed the expectations. However, the demand for CHF remained high as the broad based selling pressure on global equity indexes pushed the investors toward safer assets.

Later in the day, the mixed macro data from the U.S. failed to provide a fresh impetus for the USD. Although the personal spending and income figures improved in April in line with expectations, the PCE price index couldn't make a rebound towards the Fed's 2% target, countering and potential positive impact on the US Dollar Index. As of writing, the US Dollar Index is at 97.30, losing 0.04% on the day. Furthermore, the major equity indexes in the U.S. started the day lower, reflecting the ongoing risk aversion.

• US: Personal income increased $58.4 billion (0.4%) in April

Technical outlook

Despite yesterday's recovery move, the pair failed to stay above 0.9800 (psychological level/Fibo 23.6% retracement of May 11-22 drop) and is poised for further losses towards 0.9730 (static level), 0.9690 (May 22 low) and 0.9640 (Sept. 29 2016 low). To the upside, with a decisive break above 0.98, the pair could aim for 0.9845 (Fibo 38.2%) and 0.9900 (psychological level).