Fresh Yearly Highs For USD/CHF

There has been a continuation in the trend of traction between the US dollar (USD) and the Swiss Franc (CHF). The pair has now risen beyond the 0.99 handle to fresh highs in the year to date after experiencing a brief pause towards the end of April. This is the 10th of the last 11 sessions in which this appreciating move has occurred.

A Strengthening Foundation

This recent upsurge has been largely attributed to the strong bid tone surrounding the US dollar. This has been backed by a positive pickup in the US Treasury bond yields, meaning the current strength of the US dollar is built upon a fairly strong base.

Furthermore, the Swiss Franc has grown in safe-haven appeal for many investors who are showing a growing appetite for riskier assets. This has also been driven by the positive geopolitical developments in the relations between North and South Korea. All these things together have further boosted the pair’s bullish momentum which has now reached its highest point since December 2017.

Elsewhere, there have been some possibilities of short-term trading halts on any move beyond the 0.9920 level – this has also played a part in the pair’s latest sharp rise, which hit around 20 pips on May 1st. It would therefore be a prudent move to wait for a strong follow-through before investing in any additional short-term upward move.

Levels To Watch

The wise would be looking for a clear penetration of the 0.9945-50 mark, above which the pair will most likely aim to reclaim the parity mark as it builds towards the 1.0035 resistance point. On the other hand, any weakness back below the 0.9920 mark might initiate an unravelling of trade and pull the pair down towards the 0.9865-60 point of horizontal support.

Look out for short-term opportunities following the release of US ISM manufacturing PMI, which might influence the price dynamics of the US dollar and present some unique opportunities. The hope will be that the upward trend will continue, and current signs are indicative that this will be the case. Just make sure you choose your moments wisely.