• The USD/CHF extended its gains on Tuesday, up by 0.50% courtesy of expectations of the US Fed hiking 75 basis points.
• The major seesawed around a 160 pip range, with the USD taking the upper hand.
• USD/CHF Price Analysis: A daily close above the parity might open the door for a YTD high challenge at around 1.0064.

The USD/CHF climbs towards parity for the fifth time in the year, courtesy of a negative sentiment surrounding the financial markets, as traders prepare for an “aggressive” rate hike of the Federal Reserve on Wednesday, which could probably increase 75 bps, the Federal Funds Rate (FFR) to 1.75%. At 1.0015, the USD/CHF gains 0.45%.

The Swiss franc remains weak for the reasons above-mentioned. Additionally, another Covid-19 outbreak in China summed up the factors remaining in the backdrop, like global inflation and Russia’s invasion of Ukraine.

In the meantime, the US Dollar Index advanced 0.26% during the day, currently at 105.473, underpinned by high US Treasury yields. The US 10-year benchmark note yields 3.477%, gaining eleven basis points.

USD/CHF Price Analysis: Technical outlook

USD/CHF Tuesday’s price action witnessed a sharp U-turn. The major opened around 0.9970 and dipped sharply towards daily lows at 0.9874 before rallying to fresh monthly highs above the parity at 1.0037. That said, the USD/CHF remains upward biased in the near term.

Therefore, due to the upward bias of the pair, the USD/CHF first resistance would be the MTD high at 1.0037. A breach of the latter would expose the YTD high at 1.0064, followed by the 1.0100 figure, which, once cleared, would send the pair towards the May 2019 swing highs at around 1.0226.

Key Technical Levels