USD/CHF surges to two-month high, retakes 0.9300 mark amid explosive USD rally
|- A combination of supporting factors pushed USD/CHF to a two-month high on Thursday.
- The post-FOMC strong USD buying remained unabated through the mid-European session.
- A recovery in the equity markets undermined the safe-haven CHF and also fueled the move.
The USD/CHF pair jumped to a near two-month high during the mid-European session, with bulls looking to build on the momentum further beyond the 0.9300 mark.
The US dollar built on the overnight hawkish FOMC-inspired strong gains and shot to the highest level since July 2020 amid expectations for a faster policy tightening by the US central bank. In fact, Fed Chair Jerome Powell, answering a question during the post-meeting press conference, kept the door open for a 50 bps rate hike in March. This, in turn, was seen as a key factor that assisted the USD/CHF pair to capitalize on its strong weekly gains and continue scaling higher for the fourth successive day on Thursday.
Meanwhile, an intraday recovery in the equity markets undermined the safe-haven Swiss franc and provided an additional boost to the major. The momentum took along some short-term trading stops placed near the previous monthly swing high, around the 0.9270-0.9275 region. Hence, the bullish momentum could further be attributed to some technical buying, supporting prospects for additional gains. Nevertheless, with the latest leg up, the USD/CHF pair has rallied over 200-pips from the 0.9100 mark, or the weekly low.
Market participants now look forward to the US economic docket – featuring the releases of Advance Q4 GDP, Durable Goods Orders, Weekly Jobless Claims and Pending Home Sales. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the USD/CHF pair. Apart from this, traders will take cues from the broader market risk sentiment for some short-term opportunities around the major.
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.