- The US dollar continues to rise amid rising US bond yields.
- Positive risk sentiment is adding pressure on the CHF.
- Above 0.9330, the pair could sail towards the yearly high at 0.9470.
The US dollar has accelerated its uptrend during the US trading session on Wednesday, breaking the psychological level of 0.9300 to test 5 1/2 month highs at 0.9330. Rising US Treasury yields, combined with brighter risk sentiment, are pushing the Swiss franc lower against the dollar.
The US dollar keeps rising
The US dollar index, which measures the strength of the dollar against its main rivals, has surpassed the 94.00 level today, reaching levels not seen since November last year. Steadily rising US bond yields, triggered by expectations that the Federal Reserve will begin to reduce its bond buying program, is driving demand for the US dollar.
Beyond that, investor sentiment improved substantially on Wednesday, with major European and US stock markets making solid gains, after Tuesday’s sell-off, easing concerns about rising gas prices in Europe. and the debt crisis in the Evergrande Group of China. This scenario has undermined support for the safe haven CHF.
On the macroeconomic front, pending US home sales have shown a solid rebound in August with an increase of 8.1% in the month and with the four main regions reporting an improvement over the previous month, which has increased confidence in the USD.
USD / CHF: A break above 0.9330 could expose the yearly high at 0.9470
The pair is now testing the September high at 0.9330. Above here, the 0.9350 area (78.6% Fibonacci retracement of the April-June decline) could offer some resistance before facing the April high at 0.9470.
On the downside, the previous resistance at 0.9300 could offer support in a possible pullback. If the pair retreats to the downside, then 0.9260 (Fibonacci retracement) and the September 22 low of 0.9215 could come into play.
Technical levels
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