The Cautious Mood Ahead Of The Key Data/Events Favors The USD/CHF Buyers

• USD/CHF grinds near intraday high during the first positive day in three.
• Risk aversion joins firmer yields to underpin US Dollar rebound amid full markets.
• Geopolitical concerns surrounding China, North Korea and Russia weigh on sentiment.
• Swiss trade numbers, US PMI eyed for immediate directions, Fed Minutes is the key.

USD/CHF remains mildly bid around 0.9240, despite recently easing from the intraday high, as the Swiss pair (CHF) traders benefit from the US Dollar rebound amid sour sentiment.

It’s worth noting, however, that the cautious mood ahead of the key data/events favors the USD/CHF buyers.

That said, the US Dollar Index (DXY) snaps a two-day losing streak while marking mild gains near 104.00. In doing so, the greenback’s gauge versus the six major currencies traces the US Treasury bond yields, as well as benefits from the traditional haven status. That said, the US 10-year Treasury bond yields pick up bids to near the highest levels marked since early November 2022, mildly bid around 3.86% at the latest. While portraying the mood, S&P 500 Futures declined 0.40% intraday to 4,070 at the latest.

While tracing the run-up in the US Treasury bond yields, the fears emanating from China, North Korea and Russia seemed to have underpinned the fresh run-up in the US Treasury bond yields, amid hawkish hopes from the US Federal Reserve (Fed), as well as the US Dollar rebound. That said, the US and China alleged each other over the balloon shooting whereas the US diplomatic ties with Taiwan teased Beijing on Monday. On the same line, the United Nations (UN) Security Council is alarmed by Japan for North Korea’s missile testing and could help the US Dollar to remain firmer due to its safe-haven status.

At home, the Swiss National Bank’s (SNB) previous warnings to use open market operations to defend the CHF seemed to have weighed on the USD/CHF prices. However, the cautious mood ahead of today’s Swiss trade numbers for January and the preliminary readings of the US Purchasing Managers Index (PMI) data for February will be important for the US Dollar ahead of Wednesday’s Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes.

Overall, USD/CHF is likely to remain directed towards the north unless the US PMIs disappoint the watchers.

Technical analysis

Given the USD/CHF pair’s rebound from the previous resistance line from late November, close to 0.9225 at the latest, the buyers are likely approaching the weekly top of 0.9332. However, the 50-DMA restricts the immediate upside of the quote near 0.9245.