- Broad-based USD strength pushed USD/CHF to near three-month tops on Friday.
- Hawkish Fed expectations continued underpinning the USD and remained supportive.
- The US monthly jobs report should help determine the next leg of a directional move.
The USD/CHF pair caught some fresh bids during the early European session and shot to near three-month tops, around the 0.9275 region in the last hour.
Following the previous day's two-way range-bound price action, the USD/CHF pair managed to regain some positive traction on Friday and was supported by a broad-based US dollar strength. Speculations that the Fed will tighten its monetary policy earlier if price pressures continue to intensify continued acting as a tailwind for the greenback.
The market expectations were further fueled by Wednesday's US ISM Manufacturing survey, which showed that the prices paid sub-component jumped to a record 92.1 in June. This, to a larger extent, helped offset a fresh leg down in the US Treasury bond yields and continued underpinning the greenback and provided a modest lift to the USD/CHF pair.
On the other hand, the prevalent risk-on environment – as depicted by a generally positive mood around the equity markets – dented demand for traditional safe-haven currencies, including the Swiss franc. This was seen as another factor that remained supportive of the USD/CHF pair ongoing positive move to the highest level since April 9.
It will not be interesting to see if bulls can capitalize on the momentum or opt to take some profits off the table ahead of the US monthly jobs data. The NFP report could influence the Fed's policy outlook. This, in turn, will play a key role in driving the USD in the near term and help determine the next leg of a directional move for the USD/CHF pair.
Technical levels to watch
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