The USDCHF pair finally broke out of its overnight consolidative trading range and surged through the 0.9700 handle to hit multi-day tops in the last hour. Could the pair extend further? Gain insight into the following 4 September USDCHF Technical Analysis.
4 September, OctaFX – After yesterday’s directionless move, the pair caught some strong bids on Tuesday and was being supported by resurgent US Dollar demand. A goodish pickup in the US Treasury bond yields underpinned the greenback demand and was seen as one of the key factors driving the pair higher.
USDCHF Fundamental Highlights
Adding to this, a slight improvement in investors’ appetite for riskier assets, as depicted by some signs of stability in equity markets, dented the Swiss Franc’s safe-haven appeal and further collaborated to the pair’s strong up-move.
Meanwhile, the release of latest Swiss consumer inflation figures, coming in to show a flat m/m reading for August, did little to influence the price-action, with the USD dynamics acting as an exclusive driver of the pair’s momentum through the early European session.
The latest leg of a sudden spike of around 25-30 pips over the past hour or so could also be attributed to some technical buying, following a decisive move beyond the 0.9700 handle. Hence, a follow-through up-move, led by some additional short-covering, now looks a distinct possibility.
Later during the early North-American session, the release of US ISM manufacturing PMI will now be looked upon to grab some short-term trading opportunities.
4 September USDCHF Technical Analysis
Any subsequent up-move is likely to confront resistance near mid-0.9700s (200-day SMA), above which the momentum could further get extended towards the 0.9790-0.9800 supply zone. On the flip side, the 0.9700 handle now seems to protect the immediate downside, which if broken might turn the pair vulnerable to head back towards retesting 4-1/2 month lows, around mid-0.9600s.
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