USD / CHF struggles to find a direction stuck within a range around 0.9250

  • USD / CHF oscillates within a range during the European session on Monday.
  • Risk-off sentiment benefits the safe-haven CHF and limits the pair’s rise.
  • A modest pickup in USD demand helps limit any significant losses, at least for now.

The pair USD/CHF lacks a firm directional bias and remains stuck within a tight trading range, around 0.9250, during the European session on Monday.

A combination of divergent factors has failed to provide a significant boost to the pair. and has led to moderate and range-bound price action on the first day of a new trading week. A slight deterioration in global risk sentiment has benefited the safe-haven Swiss franc and has limited the rise of the USD / CHF pair. Having said that, a good recovery in US dollar demand has offered some support and it has helped limit any significant declines for the pair.

The USD has found some support after Fed Chairman Jerome Powell during an interview with 60 Minutes said that the U.S. economy is ready for a turnaround and higher growth should create more jobs. The comments added to the narrative of a relatively faster US economic recovery from the pandemic, bolstered by the impressive pace of coronavirus vaccines and US President Joe Biden’s $ 2 trillion infrastructure spending plan.

Powell further added that the Fed wants inflation moderately above 2% for some time, but you don’t want it to materially rise above 2%. In the context of Friday’s US PPI Producer Price Index, Stronger Than Expected, which posted the biggest annual gains in 9 1/2 years in March, Powell’s comments added to speculation about a pickup in US inflation.

This, in turn, has raised more doubts that the Fed will keep interest rates ultra-low for a longer period, which has provided an additional boost to the dollar. However, the continued decline in US Treasury yields has prevented USD bulls from opening aggressive positions and limited any significant gains for the USD / CHF pair, at least for now.

In the absence of major US economic releases, US bond yields will play a key role in influencing USD price dynamics. Apart from this, investors could follow the signals of the broader market risk sentiment to seize some short-term opportunities around USD / CHF.

USD / CHF technical levels

.

You may also like