USD/CHF spikes to fresh one-week tops near 0.9675 level

After an early dip to 0.9630 level, the USD/CHF pair regained traction and turned positive for the fourth consecutive session.

The pair built on its recent recovery move from near 8-month lows touched last week and the latest leg of sharp up-move could be attributed to a fresh wave of US Dollar buying interest, always backed by the recent pick up in the US Treasury bond yields.

Adding to this, signs of stability in European equity markets further weighed on the Swiss Franc's safe-haven appeal and drove the pair higher for the fourth consecutive session. 

Meanwhile, possibilities of some stops being triggered on a move beyond mid-0.9600s also seem to have collaborated to the pair sharp spike of 25-pips to fresh one-week tops near 0.9675 region. 

It, however, remains to be seen if the move was backed by any genuine buying or was merely a stop run. Hence, it would prudent to wait for a strong follow through buying interest before committing to any additional near-term recovery move.

Next on tap would be the release of factory orders data from the US, ahead of the key event risk - FOMC meeting minutes, due later during NY trading session.

   •  FOMC Minutes eyed for further rate hike clues - SocGen

Technical levels to watch

A follow through buying interest has the potential to continue lifting the pair further towards the 0.9700 handle, above which a fresh bout of short-covering could extend the recovery move towards 0.9725 intermediate resistance ahead of mid-0.9700s.

On the flip side, 0.9640-30 area now seems to protect the immediate downside, below which the pair would turn vulnerable to break back below the 0.9600 handle and retest 0.9585 horizontal support.