- USD / CHF advances on risk-off sentiment amid falling US bond yields.
- The divergence of monetary policy between the Fed and the SNB favors the US dollar.
- USD / CHF Technical Outlook: Slightly bullish, but would need to break above 0.9291 to consolidate the bullish bias.
The USD/CHF It is recovering from two days of consecutive losses, up 0.39%, trading at 0.9289 during the American session at the time of writing. The dollar benefits from the safe haven status, which also has the Swiss franc. However, central bank policy diverges, with the Fed reducing its QE program and hoping to raise rates, while the Swiss National Bank would keep its monetary policy loose.
The general strength of the US dollar depreciates the Swiss franc
Meanwhile, the US Dollar Index, which tracks the dollar’s performance against a basket of six rivals, is up 0.52%, recovering from 96 at 96.03, acting as a tailwind for the USD / CHF pair.
In the overnight session, USD / CHF hit a daily low at 0.9242, attributed to market sentiment absent risk and falling US Treasury yields. As the European session started, news of COVID-19 from Austria re-imposing lockdowns for 20 days on vaccinated and unvaccinated people worsened market sentiment. Additionally, coronavirus cases in Germany increased the pace of infection, reporting 52,970 new cases on Friday, threatening to slow down Europe’s largest economy.
That propelled investors toward US dollar-denominated assets, which boosted investment. However, as the New York session progresses, US Treasury yields continue to fall with the benchmark 10-year note rate at 1.534%, five basis points lower.
USD / CHF Price Forecast: Technical Outlook
USD / CHF has a bullish bias, as shown on the daily chart, with the daily moving averages (DMA) located below the spot price, acting as support. However, the uptrend looks weaker than the USD bulls expected because the spot price remains below the November 18 high of 0.9291.
To further consolidate a bullish bias in the USD / CHF pair, USD bulls need a daily close above the first. That result would expose the 2021 swing at 0.9473, but would encounter some obstacles on the way north. The first resistance would be the November 17 high at 0.9330, followed by the September 30 high at 0.9368.
Technical levels
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