- USD/CHF gained traction for the second consecutive session on Wednesday.
- Bulls seemed rather unaffected by a softer tone surrounding the greenback.
- Receding safe-haven demand weighed on the CHF and remained supportive.
The USD/CHF pair jumped to the highest level since early December, around the 0.9085 region in the last hour, albeit quickly retreated few pips thereafter.
The pair built on the previous day's strong positive momentum and gained some follow-through traction for the second consecutive session on Wednesday. The uptick lacked any obvious fundamental catalyst and could be attributed to some cross-driven strength stemming from a strong rally in the EUR/CHF cross.
This comes on the back of the overnight sustained strength above the 100-day SMA and seemed to have prompted some technical buying. Apart from this, a turnaround in the global risk sentiment – as depicted by a goodish bounce in the equity markets – undermined the safe-haven Swiss franc and remained supportive.
That said, a weaker tone surrounding the US dollar held bulls from placing aggressive bets and kept a lid on any further gains for the USD/CHF pair. The USD was pressured by a modest pullback in the US Treasury bond yields, which started losing steam after Fed Chair Jerome Powell's dovish comments on Tuesday.
During the first day of his semi-annual testimony before the Congress, Powell reiterated that interest rates will remain low and the Fed will keep buying bonds to support the US economic recovery. This makes it prudent to wait for some follow-through buying before traders start positioning for any further appreciating move.
Wednesday's US economic docket highlights the only release of New Home Sales data. Hence, the key focus will remain on Powell's second day of the semi-annual testimony before Congress. This might influence the USD price dynamics and produce some short-term trading opportunities around 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 trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.