- USD/CHF advance on risk-off market sentiment amid falling US bond yields.
- Monetary policy divergence between the Fed and the SNB favors the US dollar.
- USD/CHF Technical outlook: Mild-bullish but would need to break above 0.9291 to cement the upward bias.
The USD/CHF rebounds from two days of consecutive losses, rises 0.39%, trading at 0.9289 during the New York session at the time of writing. The greenback benefits from the safe-haven status, which also has the Swiss Franc. However, central bank policy divergence, with the Fed reducing its QE program and looking forward to hiking rates, while the Swiss National Bank would maintain its loose monetary policy.
Broad US Dollar strength depreciates the Swiss franc
In the meantime, the US Dollar Index, which tracks the greenback’s performance against a basket of six rivals, advances 0.52%, reclaiming the 96 figure at 96.03, acting as a tailwind for the USD/CHF pair.
In the overnight session, the USD/CHF reached a daily low at 0.9242, attributed to risk-off market sentiment and falling US T-bond yields. When the European session began, COVID-19 news from Austria reimposing lockdowns for 20 days to vaccinated and unvaccinated people worsened the market sentiment. Additionally, Germany’s coronavirus cases increased the infection rate pace, reporting 52,970 new cases on Friday, threatening to slow down the largest economy of Europe.
That propelled investors toward US dollar-denominated assets, boosting the buck. Nevertheless, as the New York session progresses, the US T-bond yields keep falling with the 10-year benchmark note rate at 1.534%, down five basis points.
USD/CHF Price Forecast: Technical outlook
The USD/CHF has an upward bias, as depicted by the daily chart, with the daily moving averages (DMA’s) located below the spot price, acting as support. However, the uptrend seems weaker than USD bulls expected because the spot price remains short of the November 18 high at 0.9291.
To further cement an upward bias in the USD/CHF pair, USD bulls need a daily close above the former. That outcome would expose 2021 swing high at 0.9473, but it would find some hurdles on the way north. The first resistance would be the November 17 high at 0.9330, followed by the September 30 high at 0.9368.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.