• Spain and German inflation declined YoY, but core prices still stubbornly high.
• US Dollar under pressure on risk appetite, Treasuries drift sideways.
• Further weakness in the Dollar could send USD/CHF to test the 0.9050 area.

The USD/CHF is losing over 50 pips on Thursday following Spain and Germany's preliminary Consumer Price Index (CPI) numbers and US Jobless Claims. The pair bottomed at 0.9124, the lowest level in a week.

After the beginning of the American session, USD/CHF staged a recovery to 0.9145 but it is back at 0.9130, showing that the bearish pressure persists.

Economic data on Thursday showed mixed numbers regarding inflation in the Eurozone. Spain's CPI figures came in below expectation, while the German annual CPI declined to 7.4% YoY, above the 7.5% of market consensus.

European markets are rising, with main indexes up by more than 2%. Wall Street is also rising, but off recent highs. The improvement in market sentiment weighs on the US Dollar. The DXY is falling 0.48%, approaching 102.00.

Crucial level back in the radar

The pair is headed toward the lowest daily close in two weeks and again looks at the long-term critical support area of 0.9050.

If Dollar's weakness persists, USD/CHF could drop to test the critical area. A break below, would expose 0.9000, and could open the door to significant losses ahead. At the same time, levels near 0.9050 have triggered sharp rebounds in 2023, and also during the fourth quarter of 2021.

Technical levels