USD/CHF remains confined in a trading range above parity mark

The USD/CHF pair has entered a consolidative phase and remained confined within 30-pips narrow trading range just above the parity mark.

The pair struggled to extend its recent strong recovery gains from last week's over 4-1/2 month lows to nearly 2-week highs near the 1.0035-40 region and oscillated within a narrow trading band despite of some resurgent greenback buying interest on Tuesday. In fact, the key US Dollar Index extended recent recovery trend further beyond the key 100.00 psychological mark, but failed to provide any fresh bullish impetus for the major.

Traders also seems to have ignored a larger-than-expected fall in the US trade deficit, coming in at $43.6 billion for February as compared to $48.2 billion recorded in the previous month and was beating consensus estimates anticipating $44.8 billion deficit. 

Meanwhile, a mildly cautious trading sentiment around global equity markets supported the Swiss Franc's safe-haven appeal and has eventually led to the pair's subdued, range-bound price action for the second consecutive session. 

Up next would the release of factory orders data from the US but is unlikely to provide the required momentum that could help the pair to break through the consolidative trading range. 

Technical levels to watch

Bulls would be aiming for a move beyond 1.0040 level, above which the pair is likely to aim towards testing 100-day SMA strong hurdle near 1.0075 region ahead of reclaiming the 1.0100 handle.

On the downside, retracement back below the parity mark now seems to trigger a corrective slide towards 0.9965 horizontal support, which if broken would turn the pair vulnerable to head back towards the very important 200-day SMA support near 0.9925 region.