- USD / CHF extends the positive movement of the previous day and gains continuation traction on Monday.
- Risk appetite sentiment weighs on the safe haven CHF and is seen as a key factor in extending the pair’s support.
- A sudden spike in USD demand provides an additional boost to the pair.
The pair USD / CHF has soared to highs in more than three months during the European session on Monday, with the bulls making another attempt to capitalize on the momentum beyond the 0.9100 level.
The pair has built on the strong positive movement of the previous day and has gained some traction on the first day of a new trading week. New momentum in equity markets has weighed on demand for the safe-haven Swiss franc and it has been seen as one of the key factors that extended some initial support to the USD / CHF pair.
The rally has received an additional boost due to a sudden spike in demand for the US dollar. US Treasury yields have been a key focus point amid hopes for a strong global economic recovery. The impressive rate of COVID-19 vaccination and the progress of a massive US fiscal spending plan has been fueling the reactivation of sentiment.
In fact, House of Representatives approved the $ 1.9 trillion pandemic aid package on Saturday proposed by US President Joe Biden. This, in turn, forced investors to assess the prospects for increased inflationary pressure and raised doubts that the Fed would maintain ultra-low rates for a longer period.
This finally has continued to prop up US bond yields and has offered some support for the dollar. Apart from this, the momentum could be attributed to technical buying above the 0.9080-85 resistance zone. Therefore, a further force towards the 200-day SMA, around the 0.9145 region, seems like a clear possibility.
Market participants are now awaiting the US economic calendar, highlighted by the ISM manufacturing PMI release. This, along with US bond yields, will influence USD price dynamics. Investors could follow the signs of the broader market risk sentiment to seize some short-term opportunities.
USD / CHF technical levels