USD/CHF climbs to near two-week tops, around 0.9170 region

  • USD/CHF gained strong follow-through positive traction on the first day of a new week.
  • The momentum seemed unaffected by the risk-off impulse and a modest USD pullback.
  • The pair seems poised to prolong the momentum and aim to reclaim the 0.9200 mark.

The USD/CHF pair maintained its bid tone through the early North American session and was last seen hovering near two-week tops, around the 0.9165-70 region.

The pair added to its post-NFP strong positive move and gained some follow-through traction for the second consecutive session on Monday. The momentum allowed the USD/CHF pair to build on last week’s goodish rebound from the vicinity of the key 0.9000 psychological mark, or the lowest level since June 16.

Bulls seemed unaffected by the risk-off impulse in the markets, which tends to benefit the safe-haven Swiss franc. Worries that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery weighed on investors’ sentiment, which was evident from a softer tone around the equity markets.

Meanwhile, the flight to safety led to a modest pullback in the US Treasury bond yields. This, in turn, prompted some profit-taking around the US dollar. The negative factors, to a larger extent, were offset by speculations that the Fed will reduce its pandemic-era stimulus, which acted as a tailwind for the USD.

Investors also seem to have started pricing an interest rate hike by the Fed as soon as 2022, which, in turn, supports prospects for a further near-term appreciating move for the USD. Hence, an extension of the USD/CHF pair’s ongoing positive move, towards reclaiming the 0.9200 mark, remains a distinct possibility.

There isn’t any major market-moving economic data due for release from the US on Monday. Traders, however, might take cues from scheduled speeches by Atlanta Fed President Raphael Bostic and Richmond Fed President Thomas Barkin. This, along with the US bond yields, might influence the USD and provide some impetus to the USD/CHF pair.

Technical levels to watch