USD/CHF flirts with weekly high, eyes 0.9000 mark amid broad-based USD strength

• USD/CHF scales higher for the second straight day and climbs back to the weekly high.
• The Fed’s hawkish outlook continues to underpin the USD and lends support to the pair.
• A positive risk tone undermines the safe-haven CHF and contributes to the positive move.

The USD/CHF pair attracts some buyers for the second successive day on Thursday and climbs to the top end of its weekly range, closer to the 0.9000 psychological mark during the Asian session.

The US Dollar (USD) adds to the previous day's strong gains and touches a fresh high since June 15 in the wake of Federal Reserve (Fed) Chair Jerome Powell's hawkish remarks on Wednesday. Speaking at a European Central Bank (ECB) conference, Powell reiterated that two rate increases are likely this year and also said that he does not see inflation coming down to the Fed's 2% target until 2025. This, in turn, reaffirms market bets for a 25 bps lift-off at the next FOMC policy meeting on July 25-26, which continues to underpin the Greenback and acts as a tailwind for the USD/CHF pair.

Apart from this, a generally positive tone around the equity markets is seen undermining the safe-haven Swiss Franc (CHF) and lending additional support to spot prices. That said, worries about a global economic downturn, along with reports that the US is planning more restrictions on semiconductor exports to China, keep a lid on any optimism. Investors also seem cautious ahead of the official Chinese PMI prints on Friday, which is expected to shed more light on a slowing post-COVID recovery in the world's second-largest economy. This holds back bulls from placing fresh bets around the USD/CHF pair.

Even from a technical perspective, the recent repeated failures to find acceptance above the 50-day Simple Moving Average (SMA) warrants some caution before positioning for any further appreciating move. Market participants now look to the US economic docket, featuring the release of the final Q1 GDP print, the Weekly Initial Jobless Claims and Pending Home Sales data, due later during the early North American session. This might influence the USD price dynamics, which, along with the broader risk sentiment, provide a fresh impetus to the USD/CAD pair and produce short-term trading opportunities.

Technical levels to watch