- The USD attracts some bids despite softer US inflation data.
- Bulls seemed unaffected by the prevailing cautious mood.
- Move beyond 200-DMA needed to confirm additional gains.
The USD/CHF pair maintained its bid tone through the early North-American session and climbed to near one-week tops, around mid-0.9900s in the last hour.
After an initial dip to the 0.9900 neighbourhood, the pair regained positive traction – marking the third consecutive session of up-move and built on its recent bounce from multi-month lows.
The up-move seemed unaffected by the prevailing cautious mood, which tends to underpin the Swiss Franc’s safe-haven status, with a modest US Dollar uptick providing a modest lift in the last hour.
Despite softer US consumer inflation figures for May, which reinforced market expectations that the Fed will move to cut interest rates, the greenback attracted some bids and remained supportive of the up-move.
It, however, remains to be seen if the uptick is backed by any genuine buying – negating the recent bearish trend, or is solely led by some near-term short-covering, which runs the risk of fizzling out rather quickly.
Hence, it would be prudent to wait for a sustained recovery back above the very important 200-day SMA before traders start positioning for any further appreciating move towards reclaiming the parity mark.
Technical levels to watch
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