USD/CHF climbs to mid-0.9200s, over two-week high amid sustained USD buying

• The post-FOMC strong USD buying pushed USD/CHF to over a two-week high on Thursday.
• Bulls seemed unaffected by the risk-off impulse, which tends to underpin the safe-haven CHF.
• The momentum seems strong enough to push spot prices back towards the monthly swing high.

The USD/CHF pair maintained its bid tone heading into the European session and was last seen trading around mid-0.9200s, or over a two-week high.

The pair built on this week's goodish bounce from the 0.9100 mark and gained positive traction for the fourth successive day on Thursday. The US dollar added to the post-FOMC strong gains and shot to the highest level since mid-December. This, in turn, was seen as a key factor driving the USD/CHF pair higher.

The Fed on Wednesday reinforced expectations for an eventual lift-off in March and pushed the 2-year US bond yield, which is sensitive to rate hike expectations, to the highest level since February 2020. Moreover, the yield on the benchmark 10-year government bond jumped back above 1.85% and underpinned the buck.

Meanwhile, the prospects of imminent rate hikes triggered a fresh wave of the global risk-aversion trade, which was evident from a sea of red across the equity markets. The anti-risk flow, however, did little to boost demand for the safe-haven Swiss franc or stall the USD/CHF pair's ongoing upward trajectory.

From a technical perspective, the overnight sustained strength beyond the 0.9200 mark was seen as a fresh trigger for bullish traders. The subsequent move up further validated the positive outlook and might have already set the stage for a move towards testing the monthly swing high, around the 0.9275-0.9280 region.

Market participants now look forward to the US macro releases – Advance Q4 GDP print, Durable Goods Orders, Weekly Initial Jobless Claims and Pending Home Sales data. This, along with the US bond yields, should influence the USD price dynamics and produce some trading opportunities around the USD/CHF pair.

Technical levels to watch