USD/CHF spikes to test 0.9580 resistance, where next?

Currently, USD/CHF is trading at 0.9573, up 0.23% on the day, having posted a daily high at 0.9584 and low at 0.9528.

USD/CHF is strong with a resurgence in the greenback in today's US session on the back of a relief in markets that the debt ceiling will be increased due to the disaster bill for Harvey with the Democratic leadership agreeing to support it.

Markets will continue to focus on geopolitical tensions - UOB

"The Swiss National Bank remains defensive, despite the franc’s depreciation against the Euro. The SNB continues to bloat its balance sheet to offset CHF strength. Meanwhile, its negative interest rates have pushed investors out of cash into stocks – including the stock of the SNB itself, which over the past year has doubled to over CHF 3,000 per share. The combination of a risk-taking environment and a central bank focused on debasing its money makes CHF the ideal carry funding currency," wrote Peter Rosenstreich at Swissquote.

Meanwhile, the North Korean nuclear crisis goes on and will continue promoting funding currencies like CHF. However, loose monetary policy conditions have been supporting risk-taking in emerging markets, and with demand for emerging-market FX still high, this will otherwise be a factor that will usually weigh on CHF.

USD/CHF levels

Analysts at Commerzbank explained that USD/CHF has seen an aggressive rebound from a support line circa .9420 (drawn from the November 2016 low to the July low). "The spike lower looks exhaustive and we suspect that it may have based for now. Near term rallies will find initial resistance at the 0.9695/.9699 resistance line and August 23 high. More significant resistance can be seen at the current August highs at .9770/72. Intraday dips will ideally hold circa 95.25. Failure at .9422 would open the way for the October 2014 low at .9361 to be reached," argued analysts at Commerzbank.