USD/CHF jumps to one-week highs as the Swiss franc tumbles

• Swiss franc among worst performers on Wednesday amid risk appetite.
• USD/CHF remains in the recent range, now testing the upper limit.

The USD/CHF rose from the lowest level in six days at 0.9370 to the strongest since July 7, around 0.9440 in a few hours. The move took place despite a decline of the US dollar across the board and amid higher equity prices.

The Swiss franc is among the worst performers on Wednesday. EUR/CHF is trading at the lowest in a month ahead of the meeting between European Union leaders to talk about the EU budget and the recovery fund.

Hopes that a COVID-19 vaccine would be available soon continue to boost the demand for riskier assets. The Dow Jones is up 0.95% and the Nasdaq 0.30%. Despite optimist, US yields remain near monthly lows.

The greenback gains versus the CHF but is it falling against most of its rivals. The DXY fell under 96.00 for the first time in a month. US economic data released on Wednesday came in better-than-expected (industrial production and Empire manufacturing) but it failed to offer support to the greenback.

Technical outlook

Since last week USD/CHF is trading in a range between 0.9370 and 0.9440. At the moment, it is testing the upper limit, very close to the 20-day moving average at 0.9450. A consolidation above 0.9450 would likely clear the way to more gains.

Another failure at 0.9440, would point to a continuation of the range, with a bearish bias. The critical support is seen around the 0.9370 area, and below at 0.9320.