USD/CHF clings to gains near 0.9970 zone, lacks follow-through amid risk-off

A goodish pickup in the USD demand assisted USD/CHF to regain positive traction on Wednesday.
Aggressive Fed rate hike bets, rising US bond yields acted as a tailwind for the buck and the pair.
A weaker risk tone underpinned the safe-haven CHF and kept a lid on any meaningful upside.

Haresh Menghani FXStreet

The USD/CHF pair attracted fresh buying on Wednesday and reversed a major part of the overnight slide to a four-day low. The pair maintained its bid tone heading into the North American session and was last seen trading around the 0.9970-0.9965 region, just a few pips below the daily high.

Fed Chair Jerome Powell struck a more hawkish tone on Tuesday and reaffirmed market bets for a more aggressive policy tightening by the Fed. Speaking at a Wall Street Journal event, Powell reiterated that he will back interest rate increases until prices start falling back toward a healthy level. This, in turn, pushed the yield on the benchmark 10-year US government bond closer to the 3.0% threshold, which helped revive the US dollar demand and assisted the USD/CHF pair to regain positive traction.

That said, a fresh leg down in the equity markets drove some haven flows towards the Swiss franc and held back bulls from placing aggressive bets. Concerns that the Russia-Ukraine war and the latest COVID-19 lockdowns in China would hit the global economic growth continued weighing on investors' sentiment. This makes it prudent to wait for strong follow-through buying before confirming that the recent pullback from a two-year high has run its course and placing fresh bullish bets.

Next on tap is the US housing market data - Building Permits and Housing Starts. Apart from this, the US bond yields will 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 short-term opportunities.

Technical levels to watch

USD/CHF

Overview
Today last price	0.9966
Today Daily Change	0.0031
Today Daily Change %	0.31
Today daily open	0.9935

Trends
Daily SMA20	0.9791
Daily SMA50	0.9519
Daily SMA100	0.9362
Daily SMA200	0.9288

Levels
Previous Daily High	1.0026
Previous Daily Low	0.9918
Previous Weekly High	1.0049
Previous Weekly Low	0.9872
Previous Monthly High	0.9759
Previous Monthly Low	0.9221
Daily Fibonacci 38.2%	0.9959
Daily Fibonacci 61.8%	0.9985
Daily Pivot Point S1	0.9893
Daily Pivot Point S2	0.9852
Daily Pivot Point S3	0.9786
Daily Pivot Point R1	1.0001
Daily Pivot Point R2	1.0067
Daily Pivot Point R3	1.0109

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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