- USD/CHF caught aggressive bids on Monday and rose to a one-week high.
- An escalation in the war between Russia and Ukraine lifted the USD and acted as a tailwind.
- The SNB’s verbal intervention weighed on the CHF and was supportive.
The pair USD/CHF it maintained its strong offer tone during the early American session and was last seen trading in the mid-0.9200s. just a few pips below the one-week high hit earlier this Monday.
Having shown some resilience below the very important 200-day SMA, the USD/CHF pair caught aggressive bids on Monday and rose almost 100 pips from the intraday low around the 0.9160 region. Concerns about the worsening situation in Ukraine continued to boost the US dollar’s status as a global reserve currency and acted as a tailwind for the pair.
Indeed, the USD index jumped to the highest level since May 2020 and was further supported by a sharp rise in US Treasury yields. On the other hand, some verbal intervention from the Swiss National Bank, Reiterating its commitment to intervene in the currency markets, it weighed on the Swiss franc and provided an additional boost to the USD/CHF pair.
The risk sentiment stabilized after Russia announced it would hold fire and open six humanitarian corridors to allow civilians to escape. Also, the announcement that the third round of ceasefire talks between Russia and Ukraine is scheduled to start at 14:00 GMT led to a nice recovery in equity markets and limited the upside potential, at least for now.
This, in turn, prevented traders from placing aggressive bullish bets and kept a cap on any further gains for the USD/CHF pair. In the absence of any major economic releases to move the US market, the focus will remain on the incoming geopolitical headlines surrounding the Russia-Ukraine saga. This will influence the USD and give the USD/CHF pair some momentum.
Technical levels
Source: Fx Street
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