USD/CHF jumps to near three-week high, bulls flirt with 0.9250 resistance

• Resurgent USD demand pushed USD/CHF to a near three-week high on Monday.
• Hawkish Fed expectations, elevated US bond yields extended support to the USD.
• The cautious mood could underpin the safe-haven CHF and cap gains for the pair.

The USD/CHF pair added to its strong intraday gains and shot to a nearly three-week high, around mid-0.9200s during the early North American session.

Following Friday's post-NFP retracement slide, the USD/CHF pair caught fresh bids on the first day of a new week and was supported by a strong pickup in the US dollar demand. As investors looked past the mixed US monthly jobs report, the greenback made a solid comeback amid elevated US Treasury bond yields.

In fact, the yield on the benchmark 10-year US government bond shot to the 1.80% threshold amid the prospects for a faster policy tightening by the Fed. The money markets have fully priced in the possibility of an eventual Fed lift-off in March and are anticipating four interest rate hikes by the end of 2022.

The strong intraday move up could further be attributed to some technical buying above the 0.9230 resistance zone. A subsequent strength beyond a strong horizontal zone, around the 0.9250 supply zone, will be seen as a fresh trigger for bullish traders and set the stage for a further near-term appreciating move.

Meanwhile, an extended selloff in the US bond markets tempered investors' appetite for perceived riskier assets, which was evident from the cautious mood around the equity markets. This could undermine the safe-haven Swiss franc and cap the USD/CHF pair amid absent relevant economic releases from the US.

Investors might also prefer to wait on the sidelines ahead of this week's key event/data risks, starting with Fed Chair Jerome Powell's testimony on Tuesday. Apart from this, traders will also take cues from the release of the latest US consumer inflation figures on Wednesday and the US monthly Retail Sales data on Friday.

Technical levels to watch