Dollar staged a strong recovery earlier today but lacked follow through buying to send it through yesterday's high. Consolidations is still in progress and we'd expect some more sideway trading in near term. This is echoed in the commodity markets where we see crude oil struggling below 82 level while gold is soft below 1100. US data released saw existing home sales at 5.02M annualized rate in February, slightly above expectation of 5.0M. House price index dropped less than expected by -0.6% mom in January. Canadian leading indicators rose 0.8% mom in February. the data provide little inspiration to the markets.

SNB chairman Hildebrand said today that the bank won't allow deflation risks to reemerge, and have a broad range of means to prevent an excessive appreciation of Swiss Franc to ensure that the recovery can continue. One of the measures is buying foreign currency, and the scope of such measures can be huge. Economists perceive that as stepping up the level of rhetoric against appreciation of Swiss Franc. However, the impact on markets was muted and the Franc picks up some strength again and is revisiting 1.4315 level.

On the other hand, Sterling was pressured in crosses inflation data from UK missed expectations. UK CPI dropped more than expected from 3.5% yoy to 3.0% yoy in February. Core CPI also moderated from 3.1% yoy in 2.9% yoy. CBI distributive trades dropped to 13 in Mar chart. The pound will likely remain soft ahead of tomorrow's annual budget release.

GBP/CHF is somewhat losing some downside momentum recently as seen with daily MACD crossed above signal line. But after all, outlook remains bearish as long as 1.6218 resistance hold and we'd expect the whole medium term fall from 1.8111 to extend towards 100% projection of 1.8111 to 1.6115 from 1.7110 at 1.5114, which is close to 2008 low of 1.5111.

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Dollar index recover strongly today but is held below yesterday's high of 81.08. Some more sideway trading might be seen but downside will likely be contained by 4 hours 55 EMA (now at 80.38) and bring rally resumption. We're holding on to the view that choppy consolidation from 81.34 is already finished at 79.51 after hitting 79.56 cluster support (38.2% retracement of 76.60 to 81.34 at 79.52). Break of 81.34 will confirm medium term rise resumption to 82.63 resistance next.

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EUR/CHF Mid-Day Outlook

Daily Pivots: (S1) 1.4311; (P) 1.4340; (R1) 1.4374; More

EUR/CHF's recovery was limited at 1.4370 and is now back pressing 1.4315 key support. While downside momentum is diminishing a bit, further decline is still expected as long as 1.4383 minor resistance holds. Sustained trading below 1.4315 will pave the way to to 1.4 psychological level next. On the upside, break of 1.4383 will indicate that a short term bottom is in place and stronger recovery could the be seen to 4 hours 55 EMA (now at 1.4463) before resuming the down trend.

In the bigger picture, current decline in EUR/CHF should be resuming larger term down trend from 1.6827. Sustained trading below 1.4135 (2008 low) will confirm this case and should target 61.8% projection of 1.6368 to 1.4315 from 1.5138 at 1.3869 next. On the upside, break of 1.4557 spike low resistance is needed to be first signal of bottoming. Otherwise, outlook will remain bearish.

EUR/CHF