USD/CHF moves back closer to weekly tops, bulls await a move beyond 200-DMA
|- USD/CHF witnessed some good two-way price moves during the early North American session.
- The Fed Governor Richard Clarida’s comments, risk-off mood exerted some downward pressure.
- Surging US bond yields, stronger US CPI underpinned the USD and helped regain positive traction.
The USD/CHF pair dropped to fresh daily lows, around the 0.9025 level during the early North American session, albeit quickly recovered thereafter. The pair was last seen trading around 0.9060-65 region, up 0.30% for the day.
The headline CPI posted the largest rise since September 2008 and accelerated to 4.2% YoY in April. Apart from this, the core CPI also surpassed expectations and jumped 3.0% YoY. The data added to the market worries that the rapid rise in inflation may be something more than transitory and could push the Fed to tighten its policy earlier than expected.
The US dollar, however, struggled to capitalize on the post-CPI positive move, instead met with some fresh supply after the Fed Governor Richard Clarida reiterated that inflation above 2% is due to transitory factors. Apart from this, the prevalent risk-off mood underpinned the safe-haven Swiss franc and exerted some pressure on the USD/CHF pair.
That said, a sharp spike in the US Treasury bond yields acted as a tailwind for the USD and assisted the USD/CHF pair to turn positive for the third consecutive session. It will now be interesting to see if bulls are able to build on the momentum or struggle to push the pair further beyond the very important 200-day SMA barrier, around the 0.9080-85 region.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.