USD/CHF climbs to fresh daily high, bulls await sustained move beyond 0.9200 mark

• USD/CHF staged a solid rebound from the four-week low touched earlier this Tuesday.
• A recovery in the risk sentiment undermined the safe-haven CHF and extended support.
• Bulls seemed unaffected by modest USD weakness as the focus remains on geopolitics.

The USD/CHF pair maintained its bid tone through the early North American session, with bulls now awaiting sustained strength above the 0.9200 round-figure mark.

The pair staged a goodish rebound from the 0.9150 area, or the four-week low touched earlier this Tuesday and has now reversed a major part of the previous day's losses. The momentum was sponsored by receding safe-haven demand amid a turnaround in the global risk sentiment, which weighed on the Swiss franc and extended some support to the USD/CHF pair.

A Kremlin spokesperson said Russia is still open to a diplomatic solution and has an interest in that. This helped ease concerns about the worsening Ukraine crisis and triggered a solid recovery in the equity markets. That said, the risk of a further escalation in tensions between Russia and the West over Ukraine should cap the optimistic move in the markets.

In fact, Britain imposed sanctions on five Russian banks, while German Chancellor Olaf Scholz issued an order to halt the process of certifying the Nord Stream 2 gas pipeline. The United States is also expected to announce new economic sanctions against Russia. This comes after the latter recognized two breakaway regions in eastern Ukraine as independent entities.

Nevertheless, the USD/CHF pair, so far, has managed to stick to its intraday gains and seemed rather unaffected by modest US dollar weakness. Meanwhile, a strong intraday rally in the US Treasury bond yields should help limit any meaningful USD decline. This, in turn, favours bullish traders and supports prospects for a further appreciating move for the pair.

Market participants now look forward to the release of the flash US PMI prints for February. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the USD/CHF pair. The focus, however, will remain on the situation in Ukraine, which will drive the market sentiment and allow traders to grab some short-term opportunities.

Technical levels to watch