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  • USD/CHF recovers further from multi-year lows amid some follow-through USD buying.
  • Tuesday’s upbeat US data, a goodish pickup in the US bond yields underpinned the USD.
  • The risk-on mood weighed on the safe-haven CHF and remained supportive of the uptick.

The USD/CHF pair shot to 1-1/2-week tops, around the 0.9135 region during the early European session, albeit lacked any strong follow-through and quickly retreated few pips thereafter.

A combination of factors assisted the pair to gain some follow-through positive traction for the second consecutive session on Wednesday and build on the overnight bounce from sub-0.9000 levels, or multi-year lows. The US dollar remained well supported by Tuesday’s release of US data, which showed that the manufacturing sector activity accelerated to a nearly two-year high in August amid a surge in new orders.

The data revived hopes of the US economic recovery, which along with a goodish pick up in the US Treasury bond yields extended some support to the greenback. Apart from this, the prevalent risk-on mood undermined the safe-haven Swiss franc and remained supportive of the bid tone surrounding the USD/CHF pair. However, speculations that the Fed would keep interest rates lower for longer might hold the USD bulls from placing aggressive bets.

This makes it prudent to wait for some strong follow-through buying before confirming that the pair might have bottomed out in the near-term and positioning for any further appreciating move. The pair was last seen trading just above the 0.9100 mark as market participants now look forward to the release of the ADP report on US private-sector employment for some impetus later during the early North American session.

Technical levels to watch

 

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