USD/CHF clings to mild gains above 0.9200 ahead of Swiss ZEW data, SNB Quarterly Bulletin

• USD/CHF grinds higher after posting the biggest daily gains in two weeks.
• US Dollar pares recent losses amid sluggish session amid challenges to risk-on mood, firmer yields.
• Swiss data, SNB Bulletin will be crucial for fresh impetus.

USD/CHF keeps buyers in the driver’s seat during the early Wednesday’s sluggish markets. That said, the Swiss currency pair rose the most in nearly a fortnight the previous day before portraying the latest inaction above 0.9200, up 0.10% near 0.9208 by the press time.

The latest challenges to the previous optimism, mainly from the geopolitical front, join upbeat US Treasury bond yields to help the US Dollar in extending the late Tuesday’s rebound from the weekly low.

Among them, headlines suggesting the US blacklisting of Chinese companies and Beijing’s dislike for a meeting between the White House Speak and Taiwan President. Also testing the risk-on mood could be the two-week high upbeat US inflation expectations, per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED).

Even so, the Swiss National Bank’s (SNB) ability to tame the Credit Suisse turmoil, as well as optimism surrounding the Silicon Valley Bank (SVB) deal, keeps the risk profile positive.

It’s worth noting that an absence of major disappointments from the US data also allows the USD/CHF pair to grind higher. On Tuesday, US Conference Board (CB) Consumer Confidence rose to 104.2 in March, versus 101.0 expected and an upwardly revised prior figure of 103.4. Further, US Housing Price Index rose 0.2% MoM in January versus -0.6% expected and -0.1% prior while the S&P/Case-Shiller Home Price Indices matched 2.5% YoY forecasts for the said month compared to 4.5% previous readings.

Amid these plays, US 10-year and two-year Treasury bond yields print a three-day uptrend around 3.58% and 4.10% respectively while the S&P 500 Futures print mild gains, the first in three. Further, the US Dollar Index (DXY) picks up bids to 102.60 while printing the first daily gains in three.

Looking forward, Swiss ZEW Survey details for March can offer immediate directions to the USD/CHF pair ahead of the SNB’s Quarterly Bulletin and the second-tier US data. Given the SNB’s latest defense of the banking sector, the pair traders will seek clues of the Swiss economy’s strength for further directions. Above all, Friday’s US Core Personal Consumption Expenditure (PCE) Price Index for February, the Federal Reserve’s (Fed) favorite inflation gauge, will be crucial for a clear guide.

Technical analysis

A clear upside break of a three-week-long descending trend line, now immediate support near 0.9195, directs USD/CHF buyers towards the 50-DMA hurdle surrounding 0.9255.