USD/CHF clings to strong gains near multi-month highs

Haresh Menghani FXStreet

Having risen to the highest level since March, the USD/CHF pair trimmed some of its strong gains and is now seen digesting the break-out momentum 0.9900 handle.

Currently trading around 0.9940-45 band, higher for the second consecutive session, the pair on Thursday broke through its near-term consolidation phase amid broad based US Dollar strength, primarily led by intense selling pressure around the EUR/USD major after ECB failed to provide any clues over its bond purchase program.

The pair added on to its strength after comments from Federal Reserve New York President William Dudley revived hopes of an eventual Fed rate-hike action by the end of this year. The greenback continued gaining traction on Friday, lifting the pair to seven-month highs.

In absence of any major economic releases from the US, broader sentiment around the US Dollar would remain the sole driver of the pair's momentum on Friday.

Technical levels to watch

On a sustained move back above 0.9950 level, the pair seems all set to extend its near-term bullish trajectory and head towards reclaiming parity mark in the near-term. With short-term technical indicators moving towards near-term overbought conditions, the pair might then consolidate or witness a short-term profit-taking move.

Meanwhile on the downside, weakness below session low support near 0.9925 level now seems to find support around 0.9900 handle. Any further weakness below 0.9900 handle is likely to get bought into, thus limiting additional downslide near 0.9880 horizontal support.

1. R3 1.0052
2. R2 0.9993
3. R1 0.9960
PP 0.9902
1. S1 0.9869
2. S2 0.9810
3. S3 0.9777

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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