- USD/CHF gained strong positive traction on Thursday amid a broad-based USD strength.
- The Fed taper talks and a pickup in the US bond yields extended some support to the USD.
- Upbeat US labour market reports provided an additional boost and remained supportive.
- A fall in the US equity markets failed to benefit the safe-haven CHF or hinder the move up.
The USD buying interest picked up pace during the early North American session and pushed the USD/CHF pair to two-week tops, around the 0.9030 region in the last hour.
The pair regained positive traction on Thursday, with bulls now looking to build on the momentum beyond the 0.9025-30 supply zone amid a goodish pickup in the US dollar demand. Investors have grown nervous about whether a surprisingly stronger US economic data could force the Fed to start tapering its bond-buying program sooner rather than later. The market worries were further fueled by a duo of upbeat US labour market reports.
In fact, Automatic Data Processing (ADP) reported this Thursday that the US private-sector employers added 978K jobs in May. This was much higher than 650K anticipated and to a larger extent, helped offset the downward revision of the previous month's reading to 654K from 742K reported previously. Separately, the US Initial Weekly Jobless Claims fell more than expected to 385K during the week ended May 28 from the 405K previous.
Apart from this, a goodish pickup in the US Treasury bond yields was seen as another factor that underpinned the greenback. Bulls seemed rather unaffected and largely shrugged off a sharp fall in the US equity markets, which tends to benefit traditional safe-haven currencies, like the Swiss franc. Hence, a subsequent move towards testing the very important 200-day SMA, currently around the 0.9075 region, now looks a distinct possibility.
Technical levels to watch
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