USD/CHF eases from one-week tops, still well bid around 0.9200 mark
- USD/CHF climbs to one-week tops amid a goodish pickup in the USD demand on Monday.
- Sliding US bond yields held the USD bulls from placing aggressive bets and capped gains.
- A cautious mood benefitted the safe-haven CHF and kept a lid on any meaningful upside.
A sudden pickup in the USD demand pushed the USD/CHF pair to one-week tops, around the 0.9215 region during the mid-European session.
The pair regained positive on the first day of a new trading week and moved further away from one-and-half-week-lows, around the 0.9140 area touched on Friday. The uptick was exclusively sponsored by the emergence of some fresh buying around the US dollar, though a combination of factors capped gains for the USD/CHF pair.
Despite mixed signals about the US inflation, investors remain concerned about the potential for an early move by the Fed to tighten its monetary policy. This acted as a tailwind for the greenback. That said, a fresh leg down in the US Treasury bond yields held the USD bulls from placing aggressive bets and capped gains for the USD/CHF pair.
Meanwhile, the prevalent cautious mood around the equity markets might benefit the traditional safe-haven Swiss franc. This could further keep a lid on any further upside for the USD/CHF pair. However, renewed hopes for the passage of a bipartisan US infrastructure deal – valued at $1.2 trillion over eight years – supports prospects for additional gains.
The fundamental backdrop remains tilted in favour of bullish traders. In the absence of any major market-moving economic releases from the US, intraday dips might be seen as a buying opportunity and help limit the downside for the USD/CHF pair. The key focus will remain on Friday's release of the closely watched US monthly jobs report – NFP.
Technical levels to watch