USD/CHF justifies upbeat options market signals at five-week high around 1.0950

USD/CHF bulls take a breather at the highest levels since April 11 after rising the most in two months the previous day as it justifies the bullish options market bias for the Swiss Franc (CHF) pair amid a broad US Dollar rally ahead of the key data/events.

That said, the US Dollar traces upbeat Treasury bond yields amid hawkish Fed bets and favorable data at home. Adding strength to the greenback could be the hope that the US policymakers will be able to extend the debt ceiling after the latest positive comments from them.

Also read: Forex Today: Not even risk appetite slows the Dollar

At home, the one-month risk reversal (RR) of USD/CHF, a gauge of the spread between calls and puts, braces for the second weekly positive close with the 0.0895 latest figures. It’s worth noting that the daily RR also printed a two-day uptrend with the 0.005 number by the end of Thursday’s North American session, per Reuters options market data.

While the fundamentals are in favor of the USD/CHF bulls, the Swiss Franc (CHF) pair’s further upside hinges on Fed Chairman Jerome Powell’s speech and US debt ceiling negotiations.

Hence, USD/CHF buyers are in the driver’s seat but fresh long positions should be taken with care.