- USD/CHF gains traction for the sixth day in a row and rises to a two-week high on Monday.
- Aggressive expectations from the Fed continue to support the dollar and continue to support the upward movement.
- Recession fears and risk-off mood benefit safe-haven CHF and appear to limit pair’s gains
The pair USD/CHF it continues its upward movement of the last week and rises for the sixth day in a row on Monday. The pair rises to two-week highs during the first half of the European session, although the bulls seem to have a hard time capitalizing on the move beyond 0.9600.
US dollar buying remains on the first day of a new week and proves to be a key factor that continues to act as a tailwind for the USD/CHF pair. Indeed, the dollar index rises to its highest level since mid-July and remains well supported by Fed expectations. Recent comments from several Fed officials suggest that the US central bank will maintain its aggressive tightening policy.
However, investors remain divided on the size of the next rate hike at the September meeting. Therefore, Fed Chairman Jerome Powell’s speech at the Jackson Hole Symposium on Friday will be considered for clues on the outlook for central bank policy. Additionally, traders will be guided by this week’s major US macroeconomic releases, which will weigh on the dollar and provide a further directional boost to the USD/CHF pair.
Meanwhile, growing concerns about the global economic downturn continue to weigh on investor sentiment. This is evident in the prevailing risk-off environment, which offers support to the safe-haven Swiss franc and appears to cap USD/CHF gains. The mixed fundamental backdrop warrants bullish traders’ caution and positioning for any further gains amid the absence of any relevant US economic data on Monday.
Technical levels
Source: Fx Street
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