USD/CHF advances to 5-day tops, back closer to parity mark

   “¢   Resurgent USD demand supportive of Tuesday modest gains.  
   “¢   Investors shrugged off risk-off mood/slump in the US bond yields.  
   “¢   Today’s US consumer confidence data might provide some impetus.

The USD/CHF pair built on the overnight uptick and advanced to fresh 5-day tops, around the 0.9980 region, during the mid-European session.

The pair extended last week’s rebound from sub-0.9900 level, monthly lows, and continued gaining positive traction for the second consecutive session on Tuesday. The US Dollar resumed with its strong bullish momentum, and jumped to fresh YTD tops near the key 95.00 psychological mark, and was seen as one of the key factors boosting the pair.

Meanwhile, the market seems to have largely negated the prevalent risk-off environment, with the USD price dynamics turning out to be an exclusive driver of the pair’s bullish move. The global flight to safety was evident from the ongoing slump in the US Treasury bond yields and a sell-off across equity markets, which did little to boost the Swiss Franc’s safe-haven demand and did little to dent the sentiment surrounding the major.  

Moving ahead, today’s US economic docket, featuring the release of Conference Board’s consumer confidence index, would now be looked upon for some short-term trading impetus during the early NA session. The key focus, however, would be on Friday’s keenly watched US non-farm payrolls data, which should help determine the pair’s next leg of directional move.  

Technical levels to watch

Immediate resistance is now pegged near the parity mark and is followed by the 1.0015-20 supply zone, above which the pair is likely to head back towards testing the 1.0050-60 strong resistance.  

On the flip side, 0.9955-50 area now seems to protect the immediate downside, which if broken might accelerate the fall back towards the 0.9900 handle before the pair eventually drops to 0.9835-30 support area.