USD/CHF extends post-SNB strong rally, jumps back closer to 0.9860-70 supply zone – by hareshmenghani USDCHF SNB Fed Majors Currencies
The SNB’s 50 bps seems to have disappointed traders and weighs heavily on the Swiss franc.USD/CHF
pair catches aggressive bids after the Swiss National Bank announced its policy decision earlier this Thursday and continues scaling higher through the mid-European session. The momentum lifts spot prices to a fresh two-week high, though stalls ahead of the 0.9860-0.9870 supply zone tested in August and earlier this month.
The SNB hikes its policy rate by 75 bps, as was widely expected, though some market participants have been pricing in a more aggressive 100 bps increase going into the decision. This turns out to be a key factor that weighs heavily on the Swiss franc and prompts aggressive short covering around the USD/CHF pair.
The strong intraday ascent takes along some short-term trading stops placed near the 100-day SMA. A subsequent strength and acceptance above the 0.9700 mark prompt some technical buying. This, along with the emergence of some US dollar dip-buying, provides an additional lift to the USD/CHF pair and remains supportive.market is fading rather quickly. Apart from this, a more hawkish stance adopted by the Federal Reserve continues to act as a tailwind for the greenback.
Bulls, however, might prefer to wait for a sustained strength beyond the 0.9860-0.9870 region before positioning for any further appreciating move. Next on tap will be the release of the US Weekly Initial Jobless Claims data, which might influence the USD price dynamics and provide some impetus to the USD/CHF pair.
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