- A combination of factors helped USD / CHF move further away from multi-month lows.
- A modest rally in US bond yields sustained the USD and continued to act as support.
- Investors seemed reluctant to make aggressive bets before the latest US CPI report.
The pair USD/CHF it traded with a slight positive bias during the first half of the European session and was last seen near the daily highs, around the 0.8960-65 region.
The pair built on the previous day’s bounce from the 0.8925 area, or near four-month lows, and gained some traction on Thursday. The rally was supported by a modest strength in the US dollar and a generally positive tone in equity markets, tending to undermine the safe-haven Swiss franc.
The US dollar rose amid some trade repositioning ahead of US consumer inflation figures for May, to be released later during the early days of the US session. Aside from this, a modest rally in US Treasury yields further benefited the dollar. This, in turn, acted as a tailwind for the USD / CHF pair.
The rally, however, lacked a strong follow-up buying, as investors seemed reluctant to make aggressive bets ahead of the key US CPI report.This will be an important macro piece that will set the tone for the FOMC meeting. June, which will influence the USD and provide a new directional boost to the USD / CHF pair.
Meanwhile, the combination of factors could continue to support the USD / CHF pair. So any significant drop is more likely to remain limited, at least for now.
Technical levels
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