USD/CHF can't pull away from daily lows

The USD/CHF pair is having a difficult time moving away from its daily low of 1.0125 as the US Dollar Index remains in the red below 102. At the moment the pair is down 0.17% at 1.0130.

President Mario Draghi surprised the markets with his hawkish tone allowing investors to shift their attention away from USD for the time being. Furthermore, today's initial jobless claim numbers showed an increase above market expectations putting more pressure on the greenback. Despite the weak data, markets are still pricing an 88.6% probability of a March rate hike, according to the CME Group FedWatch tool. Tomorrow's official payroll data could confirm those expectations in case it's higher than the consensus. 

Will SNB intervene?

Earlier this week SNB Chairman Thomas Jordan gave an interview to Schweiz am Wochenende newspaper and said that the CHF remains “significantly overvalued” and pledged to maintain the central bank’s expansive monetary policy of negative interest rates and intervention threats. Furthermore, citing elections in Germany and France, he warned that “such periods of increased political uncertainty are always delicate for us because Switzerland is increasingly viewed as a safe haven.”

However, according to a report published by Credit Suisse, SNB wants to maintain a sufficiently wide interest rate differential against the euro, which helps to reduce the need for persistent FX interventions over time.Also, the bank wants to continue to deter speculative behavior against the franc, such as through being active in FX intervention and surprising the market unexpectedly.

Technical levels to watch

The first resistance for the USD/CHF is at 1.0150 (Fib. 78.6% - Jan. – Feb. Fall) ahead of 1.0195/1.02 (Jan. 9 high/psychological level) and 1.0235 (Fib. %61.8). On the downside, the first support is aligned at 1.01 (psychological level) followed by 1.0075 (20-DMA) and finally 1.000 (psychological level/Feb. 28 low).