USD/CHF jumps to 5-month highs after ECB and Draghi

• A weak EUR after ECB weighs on CHF.
• USD gains momentum as yields turn again to the upside.

USD/CHF jumped after European Central Bank’s decision and rose further during Draghi’s press conference. It reached the highest level since mid-May. 

USD/CHF up on weak EUR, stronger USD

The pair opened the day trading below 0.9900 and it started to rally after the decision of the ECB to kept rates unchanged and to taper the QE program. First, it broke above yesterday’s highs and recently climbed to 0.9967. At the moment of writing it was trading above 0.9960, consolidating gains. 

Analysts considered that the ECB delivered a ‘dovish taper’, in line with forecasts. The central bank will reduce in January its bond purchases to from €60 to €30 billion a month until, at least, September 2018. Draghi mentioned that the decision was not unanimous and that a minority of members wanted a precise finalization date and not an open-ended setup. The actions from the ECB weakened the euro and also the Swiss franc. 

ECB: Dovish taper - BBH

The upside move of the USD/CHF pair was also reinforced by a stronger US dollar across the board. Since the beginning of the US session, Treasury yields moved back to the upside, supporting the greenback. 

Levels to watch 

USD/CHF continues to move with a clear bullish bias. To the upside, above 0.9960, the next strong resistance is the parity level followed by 1.0025. On the flip side, yesterday’s low at 0.9940 is now the immediate support and then the FXStreet's technical confluence indicator identifies the 0.9900 area.