Crypto currency

USD/CHF stays directed to 0.9200 amid cautious optimism

  • USD/CHF remains on the front foot after positing the heaviest daily gains since August 06.
  • Mixed covid updates, geopolitical fears weigh on the prices, comments from Fed’s Powell, downbeat data favor bulls.
  • All eyes are on US NFP but risk catalysts can offer intermediate moves.

USD/CHF edges higher around 0.9170 during Tuesday’s Asian session, following the biggest daily jump in over three weeks. The risk barometer pair takes clues from the US dollar rebound, as well as cautious optimism in the markets to portray recent gains amid sluggish sessions.

The US Dollar Index (DXY) rebounds from a two-week low to end Monday’s North American session with minimal gains near 92.70.

While Fed Chairman Jerome Powell’s speech at the Jackson Hole Symposium could be linked for initial optimism of the markets, underpinning the USD weakness, fears of Fed tapering, covid and geopolitical chatters favored the greenback buyers afterward. Fed’s Powell was hesitant to accept the need for tapering on Friday but seemed clear on no imminent rate hike. The Fed Boss also cited covid woes as a serious challenge to the economic recovery.

Elsewhere, Australia refreshed record tops and officials in Japan fear expiry of the virus-led emergencies in 24 out of 47 prefectures. Also weighing on the market sentiment, favoring the USD/CHF bulls, are the headlines suggesting the complete removal of the US troops from Afghanistan and the Sino-American jitters.

Talking about the data, downbeat prints of the US Dallas Fed Manufacturing Business Index for August and Pending Home Sales for July back the need for easy money policy and favor risk-on mood. On the other hand, the Swiss KOF Leading Indicator for August, 113.5 versus 125.0 expected and 130.9 prior, favored the USD/CHF buyers.

Amid these plays, Wall Street benchmarks closed mixed and the US 10-year Treasury yields also dropped but the S&P 500 Futures print mild gains by the press time.

Given the lack of major data/events, USD/CHF traders will keep their eyes on Friday’s US Nonfarm Payrolls for fresh impulse. However, qualitative catalysts may offer intermediate moves to the quote.

Technical analysis

Sustained trading above 100-DMA, around 0.9115, directs USD/CHF towards a downward resistance line from July 02, surrounding 0.9230.


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