USD/CHF Price Analysis: Rallies close to 100-pips and reclaims 0.9700 on a risk-on mood
|- The USD/CHF marches firmly towards a renewed test of the YTD high, near parity.
- A strong USD and improved sentiment, a tailwind for the USD/CHF.
- USD/CHF Price Forecast: To face solid resistance around 0.9760, if it’s broken, would exacerbate an upward move towards 0.9900 and beyond.
The USD/CHF soars above the 0.9700 mark for the first time since May 23, gaining 0.86% on Monday. At the time of writing, the USD/CHF is trading at 0.9709 recording minimal gains of 0.01%, as Tuesday’s Asian session begins amidst a positive market mood.
A strong USD and improved sentiment, a tailwind for the USD/CHF
A risk-on market mood persists as the Asian session starts. On Monday, reports from China that Beijing was ready to lift restrictions was cheered by investors. Global equities rallied, and the greenback rose, underpinned by high US Treasury yields, sending five and 10-year Treasury yields above the 3% threshold for the first time since May.
In the meantime, the US Dollar Index, a gauge of the buck’s value against a basket of six G10 currencies, advances 0.24%, sitting at 102.412.
The abovementioned factors were the reasons for the USD/CHF rallying sharply. On Monday, the major opened around 0.9620s, dipped to the daily low at 0.9605 (the confluence of the 20, 50, and 100-hourly simple moving averages (SMAs)), and surged without looking back, breaking on its way north, the June MTD high at 0.9658, and the 0.9700 mark.
USD/CHF Price Forecast: Technical outlook
The USD/CHF is upward biased, though it would face some solid resistance if the pair re-tests the YTD highs around the parity. The Relative Strenght Index (RSI), at 53.40, crossed above the 50-midline and is aiming higher, supporting the previously mentioned scenario.
If that scenario plays out, the USD/CHF first supply area would be the May 20 daily high at 0.9764. A breach of the latter would expose the May 19 high at 0.9885, followed by the YTD high at 1.0007.
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