USD/CHF holds steady around 0.8800, above weekly low touched on Thursday

USD/CHF trades with a mild positive bias, though subdued USD demand caps any meaningful gains.
The Fed’s hawkish outlook remains supportive of elevated US bond yields and favours the USD bulls.
A sustained move beyond the 200-day SMA is needed to reaffirm the near-term constructive outlook.

Haresh Menghani FXStreet

The USD/CHF pair ticks higher during the Asian session on Friday, albeit lacks bullish conviction and remains confined within the previous day's broader range. Spot prices currently trade around the 0.8800 mark, comfortably above a one-and-half-week low touched on Thursday and remain at the mercy of the US Dollar (USD) price dynamics.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, struggles to capitalize on the previous day's goodish rebound from its lowest level in almost three weeks and acts as a headwind for the USD/CHF pair. That said, growing acceptance that the Federal Reserve (Fed) will keep interest rates higher for longer favours the USD bulls and suggests that the path of least resistance for the currency pair is to the upside.

In fact, the minutes of the late January FOMC policy meeting released on Wednesday revealed that policymakers were concerned about cutting interest rates too quickly amid sticky inflation and a still-resilient US economy. Moreover, Fed officials reiterated the message that the central bank was in no hurry to ease its monetary policy. This remains supportive of elevated US Treasury bond yields and validates the positive setup for the Greenback.

Apart from this, the prevalent risk-on environment, which tends to undermine the safe-haven Swiss Franc (CHF), supports prospects for a further near-term appreciating move for the USD/CHF pair. Even from a technical perspective, spot prices showed resilience below the 100-day Simple Moving Average (SMA), which, along with positive oscillators on the daily chart, reaffirms the near-term constructive outlook for the currency pair.

That said, it will still be prudent to wait for sustained strength and acceptance above the very important 200-day SMA before placing fresh bullish bets around the USD/CHF pair. There isn't any relevant market-moving economic data due for release from the US on Friday. Hence, the US bond yields will continue to play a key role in driving demand for the USD. This, along with the broader risk sentiment, should provide some impetus to the major.

Technical levels to watch

USD/CHF

Overview
Today last price	0.8804
Today Daily Change	0.0004
Today Daily Change %	0.05
Today daily open	0.88

Trends
Daily SMA20	0.8735
Daily SMA50	0.8634
Daily SMA100	0.8772
Daily SMA200	0.8838

Levels
Previous Daily High	0.8822
Previous Daily Low	0.8742
Previous Weekly High	0.8886
Previous Weekly Low	0.8727
Previous Monthly High	0.8728
Previous Monthly Low	0.8399
Daily Fibonacci 38.2%	0.8791
Daily Fibonacci 61.8%	0.8773
Daily Pivot Point S1	0.8755
Daily Pivot Point S2	0.8709
Daily Pivot Point S3	0.8676
Daily Pivot Point R1	0.8834
Daily Pivot Point R2	0.8867
Daily Pivot Point R3	0.8913

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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