USD/CHF climbs further beyond mid-0.9100s, fresh session tops
- USD/CHF attracted some dip-buying near the 0.9120-15 support zone on Monday.
- The risk-on environment undermined the safe-haven CHF and extended support.
- A goodish pickup in the USD demand remained supportive of the strong move up.
The USD/CHF pair built on its goodish intraday bounce and climbed to fresh daily tops, around the 0.9160 region during the first half of the European session.
A combination of factors assisted the USD/CHF pair to reverse a modest bearish gap opening on the first day of a new trading week and rally around 40-45 pips from the 0.9120-15 support zone. The underlying bullish sentiment in the financial markets undermined the safe-haven Swiss franc. This, along with a strong pickup in the US dollar demand, provided a goodish lift to the major.
Despite a big miss on the headline NFP print, additional details kept alive hopes for an imminent taper announcement in 2021. Investors now expect the US central bank to begin rolling back its pandemic-era stimulus in December and likely end the QE by the middle of 2022. This was evident from a sharp spike in the US Treasury bond yields, which acted as a tailwind for the USD.
The USD/CHF pair, for now, seems to have snapped four days of modest losses, though any meaningful move up still seems elusive. The recent range-bound price action witnessed over the past three weeks or so points to indecision over the USD/CHF pair's near-term trajectory. Moreover, holiday-thinned liquidity conditions further warrant some caution for aggressive bearish traders.
Hence, any subsequent positive move is more likely to meet with some fresh supply near the 0.9175-80 region. This, in turn, should keep a lid on any further gains for the USD/CHF pair near the 0.9200 round-figure mark, at least for the time being.
Technical levels to watch