USD/CHF Climbs Towards 0.92 amid Broad US dollar Strength
- USD/CHF tops three-month high
- Broad US dollar strength narrates the currency market
USD/CHF Climbs Towards 0.92
The USD/CHF pair is trading to the upside for a third straight day. While Tuesday, market participants rushed to buy the US dollar. The exchange rate is hovering right below the 0.92 mark, currently at 0.9190. This is the highest level since November 11. USD/CHF reached a multi-year bottom on January 6 when the pair dived to 0.8757. Since then, a strong buying momentum has taken the pair higher by 5.00% to reach the current market price.
The pair’s price action today is trading right above the 200-day moving average. This is generally regarded as a way to indicate an exit from a bearish market and a potential for the formation of a bullish trend. However, bears might not be finished with the pair as immediate resistance lays at a previous peak at 0.9208 made on November 2.
Stimulus Package: Approval on the Horizon
The USD/CHF pair was in a long-term downtrend that started in April 2019. Back then, the rate was hovering around 1.0250. The continued slide towards the lows of November last year saw the price depreciate by nearly 15%. As bulls aim to gather enough buying momentum, the price could be affected by the ongoing economic developments in the US. More precisely, the much-anticipated stimulus package.
The American Rescue Plan, the highest economic priority in President Biden’s agenda, is set to go through Senate this week. The approval or the rejection of the proposed $1.9tn spending package has the potential to influence the price behavior of the USD/CHF pair and create heightened volatility.
The US dollar has recently been moving to the upside, favored by investors. The Greenback is marching higher against the euro and the sterling. The EUR/USD pair is in its third consecutive day of losses, currently at the 1.20 level, down from 1.2350 reached on Jan 6. The GBP/USD is also slipping, down 2.7% from its four-year high made on Feb 24 when the pair peaked at 1.4350. The Cable is currently trading at 1.3870, marking the fourth day of losses.
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