USD/CHF pierces below 0.99 handle on USD sell-off

The USD/CHF came under a renewed selling pressure in the American session and fell to its lowest level since March 28 at 0.9876 as the US Dollar Index continued to weaken against its major rivals. At the moment, the pair was trading at 0.9880, down 0.71% on the day.

The greenback's usual positive correlation with the U.S. Treasury yields seems to be losing its effect on the investors in the last couple of day. Heightened expectations of a June rate hike after yesterday's FOMC statement can be clearly seen on the CME Group FedWatch Tool's probability, which rose to 73.8% on Thursday. The 10-year U.S. T-bond yield is gaining more than 2% on the day as well. However, the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, is at 98.70, losing 0.55% on the day. With a break below 98.55, the index would reach its lowest level since Donald Trump's election victory.

On the other hand, the general risk sentiment seems to be on the negative side as the major stock indexes in the U.S. remain under pressure following a neutral start. The market sentiment and the movements in the DXY could continue to impact the pair's actions ahead of Friday's important NFP report.

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Technical outlook

The initial support for the pair sits at 0.9810 (Mar. 27 low) ahead of 0.9735 (Nov. 8 low) and 0.9700 (psychological level). On the flip side, with a rise above 0.99 (psychological level), the pair could extend its correction to 0.9970 (200-DMA) and 1.0015 (100-DMA).