- A combination of factors helped the USD / CHF gain some positive traction on Wednesday.
- A generally positive risk tone undercut the safe-haven CHF and extended some support.
- The USD benefited from a rally in US bond yields and provided additional momentum.
- The positive move stalled near the 0.9200 level amid concerns about rising COVID-19 cases.
The pair USD/CHF It fell a few pips from the daily high and found itself trading with only modest intraday gains, around the 0.9185 zone heading into the American session.
Having shown some resistance below the 200-day SMA, the USD / CHF pair attracted some buying on Wednesday and moved away from the monthly low, around the 0.9160-55 region touched the previous day. A generally positive tone in equity markets undermined the safe-haven Swiss franc and acted as a tailwind for the pair.
Apart from this, a good recovery in demand for the US dollar provided an additional boost to the USD / CHF pair. The Fed’s aggressive outlook, signaling at least three rate hikes next year, continued to act as a tailwind for the dollar, drawing additional support from an intraday rally in US Treasury yields. USA
Despite the support factors, the bulls struggled to capitalize on the move and faced rejection near the 0.9200 round level. The continued rise in new COVID-19 cases overshadowed recent optimism led by studies that the Omicron variant could be less severe than feared. This, in turn, limited the gains of the USD / CHF pair.
Therefore, it will be prudent to wait for a strong follow-up buying beyond the mentioned level before confirming that the USD / CHF pair has formed a solid base near the 0.9160-55 region. This, in turn, will set the stage for additional gains and push the pair’s prices even further towards the 0.9250 large bid zone.
Market participants are now looking forward to the US economic agenda, which features the November Goods Trade Balance figures, wholesale inventories and pending home sales. Other than this, US bond yields would influence the USD. Traders will follow the signals of the broader market risk sentiment to seize some short-term opportunities around the USD / CHF pair.
Technical levels
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