With the minutes confirming that the Fed is well and truly in hawkish mode, the market is primed towards further USD upside, especially against currencies linked to central banks still stuck in easing mode.
Given the SNB’s commitment to maintaining an easing presence in the market, there is plenty of scope for USD/CHF to run higher near term should USD data continue to encourage bulls. Indeed, even last week’s mixed US jobs report hasn’t weakened upside sentiment in the pair.
Keep An Eye On
The US CPI reading will be crucial for this trade. A strong print today will keep the market firmly focused on a March rate hike from the Fed, driving USD/CHF higher.
With the retail market around 60% short the pair, there is plenty of room for the current rally to continue if today’s data satisfies. Above 0.9288, 0.9356 is the bigger target.