- USD/CHF gained traction for the second straight day and moved further away from one-month lows.
- Signs of stability in the equity markets undermined the safe-haven CHF and remained supportive.
- A subdued USD price action might keep a lid on any further gains ahead of the US Retail Sales data.
The USD/CHF pair climbed to over one-week tops during the first half of the European session, with bulls now looking to build on the momentum beyond the 0.9200 mark.
The pair built on the previous day's goodish rebound from the 0.9120-15 region, or near one-month lows and gained traction for the second consecutive session on Friday. The uptick could be attributed to some follow-through short-covering amid signs of stability in the equity markets, which tends to undermine demand for the safe-haven Swiss franc.
On the other hand, the US dollar was seen oscillating in a narrow trading band and failed to provide an additional boost to the USD/CHF pair. That said, a strong pickup in the US Treasury bond yields, along with expectations that the Fed will tighten its monetary policy sooner than anticipated continued acting as a tailwind for the greenback.
Market participants now look forward to the US economic docket, highlighting the release of monthly Retail Sales figures. This, along with the US bond yields, might influence the USD price dynamics and provide some impetus to the USD/CHF pair. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities.
From a technical perspective, a sustained strength beyond the 0.9200 mark could be seen as a fresh trigger for bullish traders and set the stage for additional gains. The USD/CHF pair might then aim back to retest monthly swing highs, around the 0.9275 region, with some intermediate resistance near the 0.9230-35 area.
Technical levels to watch
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