USD/CHF surges to the highest level since early July amid broad-based USD strength

• USD/CHF gained strong positive traction on Thursday amid resurgent USD demand.
• The USD buying picked pace in reaction to an upbeat Retail Sales report for August.
• A subsequent strength beyond July swing highs will set the stage for additional gains.

The USD/CHF pair added to its strong intraday gains and shot to the highest level since early July, around the 0.9265-70 region during the early North American session.

The US dollar was back in demand on Thursday and got an additional boost following the release of mostly upbeat US macro data. This, in turn, was seen as a key factor that assisted the USD/CHF pair to gain strong positive traction and build on the overnight rebound from weekly lows.

In fact, the headline Retail Sale smashed consensus estimates and surprisingly increased by 0.7% in August. Moreover, sales excluding autos rose 1.8% during the reported month. Separately, the Philly Fed Manufacturing Index jumped to 30.7 for the current month from 19.4 in August.

This helped offset a slight disappointment from the US Initial Jobless Claims and reaffirmed market expectations for an imminent Fed taper announcement later this year. This was evident from a sharp spike in the US Treasury bond yields, which further underpinned the greenback.

Meanwhile, the strong intraday momentum allowed the USD/CHF pair to push through a strong hurdle near the 0.9235-40 supply zone. Some follow-through buying beyond July swing highs will confirm a near-term bullish breakout and set the stage for a further near-term appreciating move.

Technical levels to watch