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  • USD/CHF broke out of a two-day-old trading range and refreshed multi-month tops on Tuesday.
  • The upbeat US economic outlook, rising US bond yields continued underpinning the greenback.
  • A positive risk tone weighed on the safe-haven CHF and provided an additional boost to the pair.

The USD buying remained unabated through the first half of the European session and pushed the USD/CHF pair to fresh multi-month tops, around the 0.9420-25 region in the last hour.

A combination of factors assisted the pair to catch some fresh bids on Tuesday and finally broke out of a two-day-old narrow trading band. The upbeat outlook for the US economy remained supportive of the prevalent bullish sentiment around the US dollar. Apart from this, a generally positive risk tone undermined demand for the safe-haven Swiss franc and provided an additional boost to the USD/CHF pair.

Investors remained optimistic about the prospects for a relatively faster US economic recovery from the pandemic. This, along with a fresh leg up in the US Treasury bond yields, further impressed the USD bulls. In fact, the yield on the benchmark 10-year US government bond moved past the 1.75% threshold and jumped to the highest level since January 2020 in the last hour, up over 0.05 bps for the day.

Meanwhile, the latest leg of a sudden spike over the past hour or so could further be attributed to some technical buying on a sustained move beyond the 0.9400 round-figure mark. With the latest leg up, the USD/CHF pair has confirmed a fresh bullish breakout and now seems poised to prolong its recent bullish trajectory.

Market participants now look forward to the US economic docket, featuring the release of the Conference Board’s Consumer Confidence Index. Apart from this, the US bond yields will influence the USD. Traders might further take cues from the broader market risk sentiment to grab some opportunities around the USD/CHF pair.

Technical levels to watch