USD/CHF sits near two-month tops, around 0.9225-30 region

The USD/CHF pair maintained its bid tone through the first half of the European session and was last seen trading around the 0.9220-25 region.

Following the previous day's modest pullback, the USD/CHF pair caught some fresh bids on Wednesday and inched back closer to the two-month tops touched last week. This marked the third consecutive day of a positive move and was sponsored by a combination of factors – a modest US dollar strength and the underlying bullish sentiment in the financial markets.

The USD remained supported by speculations that the Fed will tighten its monetary policy if price pressures continue to intensify. The market expectations were further fueled by the Richmond Federal Reserve President Thomas Barkin's comments, saying that the Fed has made substantial further progress toward its inflation goal to begin tapering asset purchases.

The greenback was also underpinned by Tuesday's upbeat US Consumer Confidence Index, which soared to a fresh pandemic high in June. The data pointed to growing optimism above the economy and further boosted investors' sentiment. This, in turn, weighed on traditional safe-haven currencies, including the Swiss franc, and exerted additional support to the USD/CHF pair.

Market participants now look forward to the US economic docket – featuring the release of ADP report on private-sector employment, Chicago PMI and Pending Home Sales. This, along with the US bond yields, might influence the USD price dynamics. Traders might further take cues from the broader market risk sentiment to grab some short-term opportunities around the USD/CHF pair.

The key focus, however, will remain on Friday's US monthly jobs data – popularly known NFP. The closely watched report could influence the Fed's near-term monetary policy outlook, which will play a key role in driving the USD and assist investors to determine the next leg of a directional move for the USD/CHF pair.

Technical levels to watch