USD/CHF rises to 6-day highs ahead of ECB meeting

• USD/CHF gains for the third day in a row. 
• DXY recovers after being lower on Cohn’s resignation. 
• EUR/CHF at fresh 1-month high ahead of ECB meeting. 

The USD/CHF pair is about to post the third daily gain in a row. The US Dollar managed to recover following a weak start after Trump’s top economic adviser resignation. 

USD/CHF dropped to 0.9356 and then bounced, rising almost a hundred pips. It peaked during the US session at 0.9441, the highest levels since last Thursday. It was trading at 0.9430/40, up 30 pips for the day. 

The US dollar was helped by the ADP private employment report that came in at 234K above the 195K expected. Also, comments from Treasury Secretary Mnuchin with a more conciliatory tone favored the greenback and US equity prices. 

Technical  outlook 

USD/CHF is again attempting to extend the move higher but remains limited while below 0.9440/50. A daily close above the mentioned region could clear the way to more gains. The short-term tone continues to favor the upside but a failure to break and hold above 0.9450 could be a reversal signal. On top of 0.9450, the next target is the 0.9500 zone followed by the area around 0.9550. 

On the flip side, the immediate support is seen at 0.9415, below the bearish momentum is likely to intensify. The next key level is the 20-day moving average at 0.9355, a close significantly below that line would signal weakness ahead for the US Dollar. 

EUR/CHF goes further 

A source of weakness for the Swiss franc is the EUR/CHF rally. The day before the ECB meeting, the euro is about to post the sixth straight gain versus the Swissy. EUR/CHF gained 200 pips during the last five days and today rose above 1.1700, for the first time in a month. 

No change in policy is expected from the ECB but market participants are looking for a change in the language (less dovish). The statement and Draghi’s presentation are likely to have a large impact on the euro and also the Swiss franc.