- 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 capped below 1.1000, EU/ US inflation data eyed

EUR/USD is struggling below 1.1000, as the US Dollar clings to recovery gains in Asian trading hours on Thursday. Wednesday's softer-than-expected German and Spain inflation data weighed on the Euro. Investors await the Eurozone inflation data on Thursday for fresh impetus.
GBP/USD attracts some buyers near 1.2700, US PCE data looms

The GBP/USD pair attracts some buyers below the 1.2700 psychological mark during the early Asian session on Thursday. That being said, the softer US Dollar offers some support to the major pair. GBP/USD is trading near 1.2695, up 0.02% on the day.
Gold buyers turn cautious ahead of US inflation data, monthly close

Gold price is consolidating the previous pullback from six-month highs of $2,052 in Asian trading on Wednesday, treading water amid the end-of-the-month flows while awaiting the critical United States (US) Core Personal Consumption Expenditures (PCE) Price index data.
FTX token FTT jumps 8% as exchange wins approval to start selling $744 Million in Grayscale and Bitwise assets

FTX token (FTT) has jumped 8% following news that a US bankruptcy court of Delaware has allowed the now-defunct cryptocurrency exchange to move forward with a November 6 request.
Fed cuts on the table

The apparent sea change in tone from the Federal Reserve regarding potential rate cuts in 2024 is hugely significant. While "insurance cuts" have been considered an option, recent comments from Fed officials suggest a more explicit willingness to cut rates in response to lower inflation.