- USD / CHF gains traction for the second day in a row on Wednesday.
- The bulls seem unaffected by a softer tone around the USD.
- The pullback in safe haven demand weighs on the CHF and supports the pair’s upward move.
The pair USD / CHF has jumped to the highest level since early December, around the 0.9085 region, during the European session on Wednesday, although it has fallen rapidly a few pips since then.
The pair has built on the strong positive momentum of the previous day and he’s gained some continuation traction for the second day in a row on Wednesday. The rally lacks an obvious fundamental catalyst and could be attributed to some force driven by a strong rally in the EUR / CHF cross.
This comes after the previous day’s move above the 100 day SMA and appears to have triggered some technical buying. Apart from this, a sea change in global risk sentiment, as shown by a positive rally in equity markets, has weighed on the safe haven Swiss franc, supporting the USD / CHF move higher.
Having said that, a weaker tone around the US dollar has prevented bulls from opening aggressive positions and has capped any further gains for the USD / CHF pair. The US dollar has been pressured by a modest pullback in US Treasury yields, which began to lose steam after pessimistic comments from the Fed chairman, Jerome Powell, Tuesday.
During the first day of his semiannual testimony before Congress, Powell reiterated that interest rates will remain low and the Fed will continue to buy bonds to support the economic recovery. from the United States. This makes it prudent to wait for some continuation buying before investors start to position themselves for any further bullish movement.
Only the publication of new home sales data stands out on Wednesday’s US economic calendar. Therefore, the key focus will remain on Powell’s second semi-annual testimony day before Congress. This could influence the USD price dynamics and generate some short-term trading opportunities around the USD / CHF pair.
USD / CHF technical levels
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