USD/CHF steadies around mid-0.9500s as Fed Chair Powell’s speech, US ADP Employment data loom

USD/CHF treads water at a one-week high surrounding 0.9550 as traders await the key data/events scheduled for publishing on Wednesday. That said, the Swiss Franc (CHF) pair rose during the last four days amid the market’s cautious optimism even as the US Dollar Index (DXY) managed to rebound of late.

The latest positives for the market are from China as the dragon nation announced multiple measures to ease the strict lockdown in the key areas after witnessing a retreat in the daily Covid infections from a record high. Even so, the world’s second-largest economy kept its Zero-Covid policy intact. Bloomberg reported the reopening of some city buildings in the greater Zhengzhou region, the home of a key iPhone plant. Earlier on Tuesday, the news broke that China's Guangdong province will allow the close contacts of Covid cases to quarantine at home.

Even so, Wall Street closed mixed and the US 10-year Treasury bond yields ended Tuesday on a firmer footing, up six basis points (bps) to 3.748. The same helped the US Dollar Index (DXY) to print a three-day uptrend around 106.80 despite softer statistics from the United States. The reason could be linked to the hawkish comments supporting the US Federal Reserve’s steadily high-interest rates, even if a mild cut in the aggression is expected.

New York Federal Reserve Bank President John Williams and St. Louis Fed President James "Jim" Bullard were the latest supporters of higher rates. On the other hand, the US Conference Board (CB) Consumer Confidence Index dropped to 100.2 in November versus 102.2 prior (revised down from 102.5).

At home, Swiss Gross Domestic Product (GDP) for the third quarter (Q3) eased to 0.5% YoY versus 1.0% market forecasts and 2.2% prior (revised down from 2.8%).

Moving on, Federal Reserve (Fed) Chairman Jerome Powell’s first public appearance since November Federal Open Market Committee (FOMC) meeting will be crucial for the USD/CHF pair traders amid hopes of witnessing a hawkish message. Additionally, an early signal for Friday’s United States Nonfarm Payrolls (NFP), namely the ADP Employment Change for November, expected 200K versus 239K prior, will also be important to watch. Furthermore, the second reading of the United States Gross Domestic Product (GDP) for the third quarter (Q3), expected to confirm 2.6% Annualized growth, will populate the economic calendar too.

That said, the Swiss KOF Leading Indicator and Zew Survey for November are some of the second-tier data from home that can keep the USD/CHF pair traders busy.

Technical analysis

A convergence of the 50-day and 100-day Exponential Moving Average (EMA), around 0.9700-05 appears a tough nut to crack for the USD/CHF bulls.