USD/CHF remains well support above 0.9300, close to weekly peak and eyeing test of H2 2021 highs

• USD/CHF has remained well supported above 0.9300, shrugging off strong Swiss data and unreactive to the latest US data dump.
• The pair is trading higher on the week by about 2.2% and trades close to weekly highs in the 0.9330s.
• USD/CHF is now eyeing a test of H2 2021 highs in the 0.9370 area.

USD/CHF has remained well supported to the north of the 0.9300 level on Friday, as has been the case now since prior to Thursday’s US open, as the December highs at 0.9294 offer support. To the upside, technicians will note resistance in the form of weekly highs in the 0.9330s which are likely to cap the price action for the remainder of the week. The pair didn’t react to stronger than expected Swiss KOF Leading Indicator data, which edged higher for the first time since early 2021, nor has it seen much of a reaction to the recent heavy slate of US data.

Admittedly, the buck saw some minor initial weakness following evidence of easing wage pressures after the QoQ inflation rate of the Q4 Employment Cost Index fell more than expected. That may have triggered some momentary dollar profit-taking, but with a larger than expected rise in Core PCE inflation in December and heavy slate of US data next week, it is far to early to say the recent dollar rally is over.

That dollar rally, which was initially triggered on Wednesday after more hawkish than expected remarks from Fed chair Jerome Powell in the post-Fed meeting press conference, has seen USD/CHF surge from under 0.9200 to current levels above 0.9300 since Wednesday. That surge since Wednesday has taken the pair’s on-the-week gains to around 2.2% and has taken the pair to the north of the 0.9100-0.9300 range that had prevailed since the start of December.

USD/CHF is now eyeing a test of H2 2021 highs in the 0.9370 area. If next week’s US data (ISM surveys and the official labour market report) comes in hot and further boosts hawkish Fed bets, bulls will be betting that USD/CHF has a run at the 0.9400 level.