USD/CHF rallies to 18-month tops, now eyeing 1.0100 mark

   “¢   Improving risk-appetite continues to dent CHF’s safe-haven status.  
   “¢   USD regains traction after upbeat ADP report and remains supportive.

The USD/CHF pair reversed an early European session dip to 1.0035 area and climbed to 18-month tops, around the 1.0075 region, in the last hour.

A continuous improvement in global risk appetite, as depicted by a positive tone around equity markets, was seen denting the Swiss Franc’s safe-haven status and helped limit initial downtick. The CHF was also weighed down by the disappointing release of Credit Suisse Economic Expectations, which deteriorated further and dropped to a multi-year low level of 39.1 in October.

Meanwhile, the latest leg of sudden pickup could be attributed to a modest US Dollar rebound following the release of better-than-expected US ADP report, showing that private sector employment increased by 227K as compared to 189K anticipated and a downwardly revised reading of 218K recorded in the previous month.

“The US job market continues hot. Private payrolls are not the whole story for NFP but they are the largest and most productive part. A strong lead for Friday’s BLS report,” Joseph Trevisani, a senior market analyst at FXStreet commented on Wednesday’s ADP report.

Adding to this, possibilities of some short-term trading stops being triggered on a sustained move beyond 1.0055-60 region could also be one of the factors behind a knee-jerk spike of around 20-pips in the last hour or so.  

Moving ahead, market participants now look forward to the SNB Governing Board Chairman Thomas Jordan’s scheduled speech for some fresh impetus later during the US trading session. In the meantime, the prevailing bullish sentiment surrounding the USD and the broader market risk-sentiment might continue to fuel the ongoing positive momentum.  

Technical levels to watch

A follow-through buying has the potential to continue lifting the pair further beyond the 1.0100 mark towards its next major hurdle near the 1.0145-50 region. On the flip side, the 1.0050 area now becomes an immediate support to defend and any subsequent downfall now seems limited till the 1.0025-20 support area.