• A combination of factors assisted USD/CHF to gain some positive traction on Wednesday.
  • A generally positive risk tone undermined the safe-haven CHF and extended some support.
  • The USD benefited from an uptick in the US bond yields and provided an additional boost.
  • The positive move stalled near the 0.9200 mark amid worries about rising COVID-19 cases.

The USD/CHF pair retreated a few pips from the daily high and was seen trading with only modest intraday gains, around the 0.9185 region heading into the North American session.

Having shown some resilience below 200-day SMA, the USD/CHF pair attracted some buying on Wednesday and moved away from the monthly low, around the 0.9160-55 region touched in the previous day. A generally positive tone around the equity markets undermined the safe-haven Swiss franc and acted as a tailwind for the major.

Apart from this, a goodish pickup in the US dollar demand provided an additional boost to the USD/CHF pair. The Fed's hawkish outlook, indicating at least three rate hikes next year, continued acting as a tailwind for the greenback, which drew additional support from an intraday uptick in the US Treasury bond yields.

Despite the supporting factors, bulls struggled to capitalize on the move and faced rejection near the 0.9200 round-figure mark. The continuous surge in new COVID-19 cases overshadowed the recent optimism led by studies that the Omicron variant might be less severe than feared. This, in turn, capped gains for the USD/CHF pair.

Hence, it will be prudent to wait for a strong follow-through buying beyond the mentioned handle before confirming that the USD/CHF pair has formed a strong base near the 0.9160-55 region. This, in turn, will set the stage for additional gains and push spot prices further towards the 0.9250 heavy supply zone.

Market participants now look forward to the US economic docket, featuring the releases of the November Goods Trade Balance, Wholesale Inventories and Pending Home Sales. Apart from this, the US bond yields would influence the USD. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities around the USD/CHF pair.

Technical levels to watch

USD/CHF

Overview
Today last price 0.919
Today Daily Change 0.0018
Today Daily Change % 0.20
Today daily open 0.9172
 
Trends
Daily SMA20 0.9212
Daily SMA50 0.921
Daily SMA100 0.9214
Daily SMA200 0.9178
 
Levels
Previous Daily High 0.9191
Previous Daily Low 0.916
Previous Weekly High 0.9254
Previous Weekly Low 0.9169
Previous Monthly High 0.9374
Previous Monthly Low 0.9088
Daily Fibonacci 38.2% 0.9171
Daily Fibonacci 61.8% 0.9179
Daily Pivot Point S1 0.9157
Daily Pivot Point S2 0.9143
Daily Pivot Point S3 0.9126
Daily Pivot Point R1 0.9189
Daily Pivot Point R2 0.9205
Daily Pivot Point R3 0.922

 

 

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