- USD/CHF staged a goodish rebound from near one-month lows amid resurgent USD demand.
- The USD bulls seemed unaffected by Powell’s dovish testimony and declining US bond yields.
- COVID-19 jitters might underpin the safe-haven CHF and keep a lid on any meaningful upside.
The USD/CHF pair climbed to fresh daily tops, around the 0.9175 region during the early North American session and has now reversed a major part of the previous day's losses.
Following an early dip to near one-month lows, the USD/CHF pair staged a solid rebound from the 0.9120-15 region and was supported by a strong pickup in the US dollar demand. Despite the Fed Chair Jerome Powell's dovish testimony on Wednesday, investors seem convinced that the US central bank will tighten its policy sooner than anticipated amid rising inflationary pressures. This, in turn, was seen as a key factor that acted as a tailwind for the greenback and extended some support to the major.
Meanwhile, the USD bulls largely shrugged off the ongoing decline in the US Treasury bond yields and Thursday's mixed US macro releases. Data published by the US Department of Labor (DOL) revealed that there were 360K initial claims for unemployment benefits during the week ending July 10 as against the previous week's upwardly revised reading of 386K. Separately, the NY Fed's Empire State Manufacturing improved sharply to 43 in June, while the Philly Fed Manufacturing Index fell more than expected to 21.9.
However, concerns about the spread of the highly contagious Delta variant of the coronavirus continued weighing on investors' sentiment, which was evident from a weaker tone around the equity markets. This might extend some support to the safe-haven Swiss franc and keep a lid on any runaway rally for the USD/CHF pair, at least for now. Hence, any subsequent move up is more likely to confront stiff resistance and remain capped near weekly swing highs, around the 0.9200 mark. This should act as a key pivotal point for short-term traders and help determine the next leg of a directional move for the USD/CHF pair.
Technical levels to watch
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
EUR/USD remains depressed near 1.0700 ahead of EU/US data

EUR/USD is trading close to 1.0700, staying defensive at the start of the week on Monday. The US Dollar is holding post-US NFP gains amid cautious optimism, as investors assess the Fed interest rates outlook ahead of US ISM Services PMI. Eurozone data eyed as well.
GBP/USD drops below 1.2400 amid firmer US Dollar

GBP/USD is falling below 1.2400 amid a notable US Dollar demand, dragging the major lower for the second successive day on Monday. Markets repricing of the Fed interest rates outlook push the US Treasury bond yields higher, in turn, the US Dollar. US ISM Services PMI next of note.
Gold finds short-term cushion above $1,940, more downside looks solid

Gold price has found a short-term cushion near $1,943.00, however, more downside seems favored. Gold price witnessed an intense sell-off after a mean-reversion move to near the 200-period EMA at $1,977.32.
Pro-XRP attorney says Ripple has 25% chance of winning against SEC, Judge could announce verdict by September

Ripple has a 25% chance of winning its legal battle against the US SEC, according to pro-XRP attorney John Deaton. Over the weekend, Deaton shared his opinion on Ripple’s likelihood of both an outright win and a partial victory.
Services PMIs the next focus after last week’s bumper US jobs report

While US markets finished the week on a high, after another bumper jobs report and a positive week across the board, markets in Europe, while finishing the week on a high, struggled to match the exuberance of investors on the other side of the Atlantic.