- USD/CHF gained traction for the third straight day amid sustained USD buying interest.
- Hawkish Fed expectations, upbeat ADP report continued acting as a tailwind for the USD.
- The prevalent risk-on mood undermined the safe-haven CHF and remained supportive.
The USD buying picked up pace during the early North American session and pushed the USD/CHF pair to two-and-half-month tops, around mid-0.9200s in the last hour.
The pair built on this week's positive move and gained some follow-through traction for the third consecutive session amid a broad-based US dollar strength. Despite mixed signals on the US inflation, investors have been speculating about the prospects for an earlier policy tightening by the Fed.
The already stronger greenback got an additional boost following the release of the ADP report, which showed that private-sector employers added 692K jobs in June. The reading was well below the previous month's blowout reading of nearly one million but was still better than market expectations for 600K.
On the other hand, a generally positive tone around the equity markets acted as a headwind for traditional safe-haven currencies, including the Swiss franc. This, in turn, helped offset the ongoing sharp decline in the US Treasury bond yields and provided an additional boost to the USD/CHF pair.
From a technical perspective, a move beyond the previous monthly swing highs, around the 0.9230-40 zone, might have already set the stage for a further near-term appreciating move. It, however, remains to be seen if bulls are able to capitalize on the move as the focus remains on Friday's NFP report.
The closely watched US monthly jobs data could influence the Fed's monetary policy outlook and play a key role in influencing the USD price dynamics in the near term. This would eventually assist investors to determine the next leg of a directional move for the USD/CHF pair.
Technical levels to watch
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