USD/CHF eases from tops, still well bid around 0.9130-35 area
- USD/CHF edged higher on Wednesday and snapped three consecutive days of the losing streak.
- A generally positive risk tone undermined the safe-haven CHF and extended support to the pair.
- A modest USD strength remained supportive of the move up ahead of US Durable Goods Orders.
The USD/CHF pair traded with a mild positive bias through the first half of the European session, albeit has retreated around 20 pips from daily tops. The pair was last seen trading around the 0.9130-35 region, up 0.10% for the day.
A combination of supporting factors assisted the USD/CHF pair to gain some positive traction on Wednesday and stage a goodish bounce from one-week lows touched in the previous session. The pair, for now, seems to have snapped three consecutive days of the losing streak and stalled its recent pullback from levels just above the 0.9200 mark.
Concerns about the fast-spreading Delta variant eased after China said that it had stopped the community spread of COVID-19. Adding to this, the US Food and Drug Administration (FDA) granted full approval to the Pfizer/BioNTech COVID-19 vaccine. The development raised hopes that inoculations in the US could accelerate and restored investors' confidence.
This was evident from a generally positive tone around the equity markets, which undermined demand for the safe-haven Swiss franc acted as a tailwind for the USD/CHF pair. Apart from this, a modest US dollar strength provided an additional lift to the major, though the uptick lacked the bullish conviction of any follow-through buying beyond mid-0.9100s, at least for now.
The greenback found support from some follow-through uptick in the US Treasury bond yields. This, along with expectations that the Fed might still begin rolling back its pandemic-era stimulus in 2021, further extended some support to the greenback. Investors, however, seemed reluctant ahead of Fed Chair Jerome Powell's speech at the Jackson Hole Symposium.
Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders later during the early North American session. Apart from this, the US bond yields might influence the USD price dynamics. Traders will further take cues from the broader market risk sentiment for some short-term opportunities around the USD/CHF pair.
Technical levels to watch