USD/CHF fails ahead of 0.97 handle, retreats to session lows near mid-0.9600s

The greenback held weaker through early NA session on Wednesday, with the USD/CHF pair retreating around 50-pips from the vicinity of 0.9700 handle touched in the past hour. 

The US Dollar turned defensive after the US President Donald Trump threatened to shut down the government in order to secure funding for a proposed border wall with Mexico. This coupled with renewed concerns over the Trump administration's ability to deliver on promised pro-growth economic agenda further dented sentiment around the greenback and failed to assist the pair to build on overnight strong up-move. 

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Meanwhile, a fresh wave of global risk aversion trade, as depicted by the prevalent negative trading sentiment around European equity markets and indications of a weaker opening in the US, provided an additional boost to the Swiss Franc's safe-haven appeal and also collaborated to the pair's retracement to session lows near mid-0.9600s. 

Next of relevance from the US economic docket would be the release of flash manufacturing & services PMI prints, which would be followed by new home sales data. The key focus, however, would remain on the Fed Chair Janet Yellen's speech at the very important Jackson Hole Symposium, which might influence Fed rate hike expectations and eventually help determine the pair's near-term trajectory.

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Technical levels to watch

Immediate support is pegged near the 0.9620-15 region, below which the pair is likely to accelerate the fall towards 0.9585-80 intermediate support en-route 0.9555 horizontal level. On the upside, 0.9685 level might now act as an immediate hurdle, which if cleared now seems to lift the pair beyond the 0.9700 handle towards its next major barrier near 0.9725 area.