- USD / CHF breaks out of its two-day range and rises to multi-month highs on Tuesday.
- The optimistic US economic outlook and rising US bond yields continue to prop up the dollar.
- A positive risk tone weighs on the safe haven CHF and provides an additional boost to the pair.
The USD buying has been sustained unabated during the first half of the European session on Tuesday and has pushed the USD / CHF pair to new multi-month highs, around the 0.9420-25 region.
A combination of factors has helped the pair capture some new buying on Tuesday and has finally broken out of its tight two-day trading range. The optimistic outlook for the US economy has continued to support the prevailing bullish sentiment around the US dollar.. Apart from this, a positive risk tone has weighed on the demand for the safe haven Swiss franc and provided an additional boost to the USD / CHF pair.
Investors have remained optimistic about the Prospects for a Relatively Quicker US Economic Recovery of the pandemic. This, coupled with a new boost in US Treasury yields, has further impressed the USD bulls. In fact, the yield on the 10-year US government bond has surpassed the 1.75% level and has jumped to the highest level since January 2020.
Meanwhile, the latest leg of a sudden rebound today could be attributed to some technical buying after a sustained move above the 0.9400 round level. With the latest move to the upside, the USD / CHF pair has confirmed a further break to the upside and now appears poised to prolong its recent bullish move.
Market participants are now awaiting the US economic calendar, which includes the release of the Conference Board’s Consumer Confidence Index. Other than this, US bond yields will influence the USD. Investors could follow the signs of the broader market risk sentiment to seize some opportunities around the USD / CHF pair.
USD / CHF technical levels
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