USD/CHF bulls eyeing a break through 3-day old trading range
• A modest USD uptick helps build on overnight strong gains.
• Fading safe-haven demand provides an additional boost.
• A follow-through buying needed to confirm further up-move.
The USD/CHF pair was seen building on overnight strong gains and is currently placed at the top end of a 3-day old trading range, just below mid-0.9900s.
With investors looking past the latest political turmoil in the Euro-zone's largest economy, Germany, a fresh wave of global risk-on trade continued driving flows away from perceived safe-haven currencies, including the Swiss Franc.
Meanwhile, firming expectations for a December Fed rate hike action, reinforced by an uptick in the short-end (2 & 5-yrs) Treasury bond yields, lifted the key US Dollar Index back above the 94.00 handle and further collaborated to the pair's modest uptick for the second consecutive session.
It, however, remains to be seen if the pair is actually able to decisively break through the trading range or the up-move is being utilized to initiate fresh short-positions amid skepticism over the passage of a long-awaited US tax cut legislation.
On the economic data front, the only scheduled release of existing home sales data might provide some short-term trading impetus ahead of a scheduled speech by the current Fed Chair Janet Yellen.
Technical levels to watch
A strong follow-through buying interest beyond 0.9960 level now seems to assist the pair to make a fresh attempt towards reclaiming the parity mark before eventually darting towards 1.0030-35 supply zone.
On the flip side, the 0.9900 handle is likely to protect the immediate downside, which if broken could drag the pair back towards 0.9870 intermediate support en-route the very important 200-day SMA support near the 0.9810 region.