• USD/CHF gained traction for the ninth straight day and shot to a nearly four-week high.
• Aggressive Fed rate hike bets pushed the USD to a 20-year high and remained supportive.
• The risk-off mood did little to benefit the safe-haven CHF or hinder the strong move up.

The USD/CHF pair built on the previous day's bullish breakout momentum through the 0.9800 mark and gained follow-through traction on Tuesday. This marked the ninth straight day of a positive move and pushed spot prices to a nearly four-week high, around mid-0.9800s during the early part of the European session.

With the latest leg up, the USD/CHF pair has rallied over 350 pips from sub-0.9500 levels touched on June 29 and the strong move up was sponsored by relentless US dollar buying. Expectations that the Fed would retain its aggressive policy tightening path continued underpinning the USD and pushed it to a fresh 20-year high.

The FOMC minutes released last week emphasized the need to fight inflation even if it results in an economic slowdown and reaffirmed hawkish Fed expectations. Adding to this, policymakers indicated that another 50 or 75 bps rate hike is likely at the upcoming FOMC meeting in July, which, in turn, favours the USD bulls.

The prospects for a further rise in interest rates, along with the ongoing Russia-Ukraine war and the latest COVID-19 outbreak in China, have been fueling recession fears. This, in turn, weighed on investors' sentiment, though did little to benefit the safe-haven Swiss franc or hinder the USD/CHF pair's positive move.

The price action supports prospects for a further near-term appreciating move, though traders might prefer to wait for the release of the US consumer inflation figures on Wednesday. In the meantime, the USD price dynamics would play a key role in influencing the USD/CHF pair amid absent relevant economic data from the US.

Technical levels to watch