• A combination of factors prompted a short-covering move around USD/CHF on Thursday.
  • A strong pickup in the USD demand was seen as a key factor that provided a goodish lift.
  • The risk-on mood undermined the safe-haven CHF and remained supportive of the move.

The USD/CHF pair added to its intraday gains and shot to a fresh daily high, around the 0.9180 region during the first half of the European session.

The pair witnessed a short-covering move on Thursday and moved away from the lowest level since November 10, around the 0.9145 region touched in the previous day. The recovery momentum lifted spot prices back above the very important 200-day SMA and was sponsored by a combination of supporting factors.

The underlying bullish tone in the markets undermined the safe-haven Swiss franc and provided a goodish lift to the USD/CHF pair amid resurgent US dollar demand. Despite the continuous surge in new COVID-19 cases, investors remain optimistic amid signs that the Omicron variant might be less severe than feared.

On the other hand, the greenback drew some support from the overnight spike in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond shot to 1.56% for the first time since November 29, while the two-year yield, which is sensitive to interest rate moves, rose to the highest since March 2020.

It, however, remains to be seen if the USD/CHF pair is able to capitalize on the move as investors might refrain from placing aggressive bets amid thin end-of-year trading volumes. Hence, it will be prudent to wait for a strong follow-through buying before confirming that the recent downtrend is over and placing fresh bullish bets.

Market participants now look forward to the US economic docket, featuring the releases of Weekly Initial Jobless Claims and Chicago PMI. This, along with the US bond yields, will influence the USD. Apart from this, traders might 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 0.9179
Today Daily Change 0.0033
Today Daily Change % 0.36
Today daily open 0.9146
 
Trends
Daily SMA20 0.9209
Daily SMA50 0.9209
Daily SMA100 0.9213
Daily SMA200 0.9177
 
Levels
Previous Daily High 0.9202
Previous Daily Low 0.9127
Previous Weekly High 0.9254
Previous Weekly Low 0.9169
Previous Monthly High 0.9374
Previous Monthly Low 0.9088
Daily Fibonacci 38.2% 0.9155
Daily Fibonacci 61.8% 0.9173
Daily Pivot Point S1 0.9115
Daily Pivot Point S2 0.9084
Daily Pivot Point S3 0.9041
Daily Pivot Point R1 0.919
Daily Pivot Point R2 0.9233
Daily Pivot Point R3 0.9264

 

 

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