USD/CHF flirts with weekly highs, bulls expect sustained strength above 50-day SMA

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  • USD/CHF hits a new weekly high on Friday amid a nice pickup in demand around the dollar.
  • Expectations for aggressive Fed rate hikes and high US bond yields continue to support the dollar.
  • Risk aversion benefits the safe-haven CHF and limits the pair’s significant rise.

The pair USD/CHF it moves higher on Friday and reaches a new weekly high at the beginning of the European session. However, the bulls are having a hard time taking advantage of the move or finding acceptance above the 50-day SMA and the intraday move. stops just before 0.9650.

The US dollar strengthens again and reverses an initial decline to a multi-day low, which turns out to be a key factor driving the USD/CHF pair higher. The expectations that the Federal Reserve will raise interest rates at a faster pace to curb inflation they continue to support the dollar. These expectations were confirmed by the US CPI report on Tuesday, which was stronger than expected.

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Indeed, markets have been pricing in the possibility of a 100 basis point rate hike at the next FOMC policy meeting on September 20-21, and another 75 basis point hike in November. This continues to support elevated US Treasury yields, which continue to act as a tailwind for the dollar and support the USD/CHF pair.

That said, the risk aversionas evidenced by a new downward movement in the stock markets, boosts some safe-haven money flows into the Swiss franc and caps USD/CHF gains. Market sentiment remains fragile on concerns that rising interest rates and headwinds stemming from renewed COVID-19 lockdowns in China will lead to a deeper economic downturn.

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Investors may also prefer to stay on the sidelines ahead of next week’s central bank risks. The Fed is scheduled to announce its monetary policy decision on Wednesday and the Swiss National Bank (SNB) is due to meet on Thursday. Therefore, it is prudent to wait for some continuation buying before positioning for any further upside moves in the pair.

USD/CHF technical levels

USD/CHF

Overview
last price today 0.9631
daily change today 0.0014
Today’s daily variation in % 0.15
Daily opening today 0.9617
Trends
daily SMA20 0.9688
daily SMA50 0.9644
daily SMA100 0.9692
daily SMA200 0.9482
levels
Previous daily high 0.9642
Previous Daily Low 0.9556
Previous Weekly High 0.987
Previous Weekly Low 0.9547
Previous Monthly High 0.9808
Previous Monthly Low 0.9371
Daily Fibonacci of 38.2% 0.9589
Daily Fibonacci of 61.8% 0.9609
Daily Pivot Point S1 0.9568
Daily Pivot Point S2 0.9519
Daily Pivot Point S3 0.9482
Daily Pivot Point R1 0.9654
Daily Pivot Point R2 0.9691
Daily Pivot Point R3 0.974

Source: Fx Street

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