USD/CHF pares Thursday’s losses, approaches 0.9300 on broad US dollar strength

• USD/CHF advance on risk-off market sentiment amid falling US bond yields.
• Monetary policy divergence between the Fed and the SNB favors the US dollar.
• USD/CHF Technical outlook: Mild-bullish but would need to break above 0.9291 to cement the upward bias.

The USD/CHF rebounds from two days of consecutive losses, rises 0.39%, trading at 0.9289 during the New York session at the time of writing. The greenback benefits from the safe-haven status, which also has the Swiss Franc. However, central bank policy divergence, with the Fed reducing its QE program and looking forward to hiking rates, while the Swiss National Bank would maintain its loose monetary policy.

Broad US Dollar strength depreciates the Swiss franc

In the meantime, the US Dollar Index, which tracks the greenback’s performance against a basket of six rivals, advances 0.52%, reclaiming the 96 figure at 96.03, acting as a tailwind for the USD/CHF pair.

In the overnight session, the USD/CHF reached a daily low at 0.9242, attributed to risk-off market sentiment and falling US T-bond yields. When the European session began, COVID-19 news from Austria reimposing lockdowns for 20 days to vaccinated and unvaccinated people worsened the market sentiment. Additionally, Germany’s coronavirus cases increased the infection rate pace, reporting  52,970 new cases on Friday, threatening to slow down the largest economy of Europe.

That propelled investors toward US dollar-denominated assets, boosting the buck. Nevertheless, as the New York session progresses, the US T-bond yields keep falling with the 10-year benchmark note rate at 1.534%, down five basis points.

USD/CHF Price Forecast: Technical outlook

The USD/CHF has an upward bias, as depicted by the daily chart, with the daily moving averages (DMA’s) located below the spot price, acting as support. However, the uptrend seems weaker than USD bulls expected because the spot price remains short of the November 18 high at 0.9291. 

To further cement an upward bias in the USD/CHF pair, USD bulls need a daily close above the former. That outcome would expose 2021 swing high at 0.9473, but it would find some hurdles on the way north. The first resistance would be the November 17 high at 0.9330, followed by the September 30 high at 0.9368.