Bulls have the upper hand, 0.9745-50 confluence hurdle breakout in play

  • USD/CHF shot to a nearly three-week high on Tuesday amid broad-based USD strength.
  • The risk-off mood underpinned the safe-haven CHF and capped any meaningful upside.
  • Acceptance above the 0.9745-0.9750 confluence supports prospects for additional gains.

The USD/CHF pair gained strong follow-through traction for the third successive day on Tuesday and shot to a nearly three-week high during the early North American session. The pair was last seen trading around the 0.9765-0.9770 region, up over 0.60% for the day.

The recent surge in the US Treasury bond yields continued lending support to the US dollar, which, in turn, was seen as a key factor that acted as a tailwind for the USD/CHF pair. Bulls seemed unaffected by a softer risk tone, which tends to benefit the safe-haven Swiss franc.

The momentum pushed spot prices through the 0.9745-0.9750 confluence hurdle, comprising a 200-period SMA on the 4-hour chart and the 38.2 Fibonacci retracement level of the 1.0064-0.9545 downfall. This might have already set the stage for a further near-term appreciating move.

Given that oscillators on the daily chart have just started gaining positive traction, the USD/CHF pair seems poised to reclaim the 0.9800 mark. The said handle coincides with the 50% Fibo. level, which if cleared decidedly would be seen as a fresh trigger for bullish traders.

The USD/CHF pair might then accelerate the upward trajectory towards testing the 61.8% Fibo., around the 0.9870 region en-route the next relevant barrier near the 0.9900 mark and the 0.9925-0.9930 area.

On the flip side, pullback below the 0.9750-0.9745 confluence resistance breakpoint might now be seen as a buying opportunity and remain limited near the 0.9720-0.9715 region. This is followed by the 0.9700 mark, which if broken might shift the bias in favor of bearish traders.

USD/CHF 4-hour chart

Key levels to watch

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