USD/CHF struggles near parity mark amid notable USD supply

   •  USD long unwinding trade remains a key theme on Friday as well.
   •  Sliding US bond yields/weaker equities add to the pair’s weakness.

The USD/CHF pair broke down of its Asian session consolidation phase and slipped back below the parity mark, closer to weekly lows.

The pair extended softer US CPI-led retracement slide from fresh one-year tops and traded with a negative bias for the second consecutive session on Friday amid a follow-through US Dollar weakness.

The ongoing retracement slide in the US Treasury bond yields, amid fading prospects of faster Fed rate hike moves, prompted traders to continue unwinding their long USD bets and was seen weighing on the major. 

This coupled with a cautious sentiment around European equity markets benefitted the Swiss Franc's safe-haven appeal and further collaborated to the pair's downfall on the last trading day of the week. 

The pull-back, however, might still be categorized as a corrective in nature, especially after the pair's relentless rally of over 500-pips from April lows. Hence, it would be prudent to wait for a strong follow-through selling before confirming that the pair might have topped out in the near-term.

On the economic data front, the only scheduled release of Prelim UoM Consumer Sentiment index from the US might produce some short-term trading opportunities during the early NA session.

Technical levels to watch

Immediate support is pegged near 0.9975 level, which if broken could accelerate the corrective slide further towards 0.9950 level en-route the 0.9920-15 support. On the upside, the 1.0040-50 region might continue to act as an immediate strong hurdle, above which the pair is likely to aim towards reclaiming the 1.0100 handle.