- USD / CHF gains traction for the third day in a row amid sustained buying interest around USD.
- Softer risk sentiment does not benefit the CHF as a safe haven or hinder the strong momentum of the pair.
The pair USD/CHF has continued to move higher during the European session on Tuesday and has soared to the highest level since November 2020, around the 0.9190-95 region in the last hour.
The pair has taken advantage of its recent bullish momentum and gained some continuation traction for the third day in a row on Tuesday. The rally marks the fifth day of a positive move from the previous six and it is due exclusively to a generalized strength of the US dollar.
The awesome Vaccination Pace for COVID-19 and Progress on America’s Massive Fiscal Spending Plan It has been fueling hopes for a relatively faster economic recovery from the pandemic in the United States. This, in turn, has been seen as a key factor that has continued to prop up the USD.
Meanwhile, reflation trading has forced investors to begin to price a possible spike in inflation and has raised doubts that the Fed would maintain ultra-low rates for a longer period. This has further benefited the US dollar and provided an additional boost to the USD / CHF pair.
Tuesday’s strong positive move could also be attributed to some technical buying after a sustained move past the very important 200-day SMA. Even a softer risk tone, which tends to push money flows into the safe-haven Swiss franc, has done little to hamper momentum.
Therefore, some continuation force to regain the round 0.9200 level, approaching the lows of November 2020, now seems like a clear possibility. Having said that, slightly overbought RSI on daily chart warrants some consolidation before the next move up.
There is no major economic data release from the United States on Tuesday. Therefore, USD price dynamics will continue to play a key role in influencing the USD / CHF pair. Investors could follow the signs of the broader market risk sentiment.
USD / CHF technical levels
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