USD/CHF surges to 0.9600 handle amid reviving USD demand
| • A strong rally in US bond yields helps ease USD bearish pressure.
• Risk-on mood further weighs on CHF’s safe-haven appeal.
• Remains track to post second consecutive week of losses.
The USD/CHF pair staged a solid rebound after refreshing multi-month lows and now seemed aiming to move back above the 0.9600 handle.
Heightened fears about a possible US government shutdown continued exerting downward pressure on the US Dollar and dragged the pair to an intraday low level of 0.9535, lowest since September 11.
However, the ongoing upsurge in the US Treasury bond yields now seems to have eased the bearish pressure and helped the pair to rebound around 60-pips from session lows.
Adding to this, strong gains across equity markets, pointing to increasing investors' appetite for riskier assets was seen weighing on the Swiss Franc's safe-haven appeal and further contributed to the pair's strong rebound since the early European session.
With the only scheduled release of Prelim UoM Consumer Sentiment, today's US economic docket lacks any major market moving data. Hence, the broader market risk sentiment and the USD price dynamics would continue to act as key determinants of the pair's momentum on the last trading day of the week.
Technical levels to watch
On a sustained move beyond the 0.9600 handle, a fresh bout of short-covering could accelerate the up-move towards 0.9630 intermediate hurdle en-route the 0.9655-60 supply zone. On the flip side, 0.9550 area now seems to act as an immediate support, which if broken now seems to turn the pair vulnerable to head towards testing the key 0.9500 psychological mark.
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