- USD/CHF added to the previous day’s positive move and gained follow-through traction on Monday.
- The risk-on mood undermined the safe-haven CHF and was seen as a key factor extending support.
- A sudden pickup in the USD demand provided an additional boost to the pair and remained supportive.
The USD/CHF pair shot to over three-month tops during the early European session, with bulls making a fresh attempt to build on the momentum beyond the 0.9100 mark.
The pair built on the previous session's strong positive move and gained some follow-through traction on the first day of a new trading week. A fresh leg up in the equity markets undermined demand for the safe-haven Swiss franc and was seen as one of the key factors that extended some early support to the USD/CHF pair.
The uptick got an additional boost from a sudden pickup in the US dollar demand. The US Treasury bond yields remained a key focal point amid hopes over a strong global economic recovery. The impressive pace of COVID-19 vaccinations and the progress on a massive US fiscal spending plan has been fueling the reflation trade.
In fact, the House of Representatives passed US President Joe Biden's proposed $1.9 trillion pandemic relief package on Saturday. This, in turn, forced investors to price in the prospects for a rise in inflationary pressure and raised doubts that the Fed would retain ultra-low rates for a longer period.
This eventually continued underpinning the US bond yields and extended some support to the greenback. Apart from this, the momentum could further be attributed to technical buying above the 0.9080-85 supply zone. Hence, a subsequent strength towards 200-day SMA, around the 0.9145 region, looks a distinct possibility.
Market participants now look forward to the US economic docket, highlighting the release of the ISM Manufacturing PMI. This, along with the US bond yields, will influence the USD price dynamics. Traders might further take cues from the broader market risk sentiment in order to grab some short-term opportunities.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.