USD/CHF nearing the 0.9800 handle amid the USD long trade

The US bond yields sent the US dollar higher with the 10-year benchmark at highs not seen since 2014.
The USD/CHF is nearing its 100-period simple moving average at 0.9790 on the weekly chart.

Flavio Tosti Independent Analyst

The USD/CHF is trading at around 0.9771 up 0.25% as the pair is underpinned by strong US dollar demand stemming from rising US bond yields.

The US Dollar Index, which gauge the greenback against a basket of currencies is only a few ticks away from March 1 high at the 90.93 level. The index has gained a strong bullish momentum in the last five days of trading helped by the bull trend in the US Treasury yields with the 10-year benchmark close to 3.00% which is a level not seen since 2014. The US fiscal policy boost along with expectations of more rate hikes by the Federal Reserve Bank are behind the up move in the bond yields according to analysts at Danske Bank.

On the broader picture, the Swiss franc remains weak against the greenback as the Swiss National Bank (SNB) is not expected to raise interest rates in the foreseeable future with no big surprises expected there. President Thomas Jordan recently talked to Bloomberg. More details here.

Earlier on Monday, the housing data came better than expected, advancing 1.1% over the month in March while the Manufacturing Purchasing Managers Index (PMI) rose to 56.5, the highest level in the last 43 months. On the other hand, the manufacturing activity in Chicago regional area fell to 0.10 in March, coming out below expectations. However, it is important to point out that the tier-two data were largely overshadowed by the jump in US bond treasury yields.

USD/CHF daily chart

The trend is bullish. Resistance is seen at 0.9846 swing high and at 0.9978 swing high while support is seen at 0.9653 swing high and at 0.9533 swing low

Author

Flavio Tosti

Independent Analyst

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