USD/CHF spikes to fresh 6-week tops, nears 200-DMA around mid-0.9900s

• US-China trade optimism continues to weigh on the CHF’s safe-haven status.
• The USD underpinned by rising US bond yields and remained supportive.

The USD buying interest picked up the pace during the early European session on Wednesday and lifted the USD/CHF pair to fresh six-week tops, around the 0.9940 region in the last hour.
 
After the previous session’s flat closing, a combination of supporting factors helped the pair to regain positive traction on Wednesday and build on its recent strong recovery move from yearly swing lows touched on August 13.

Risk-on mood inspiring bulls

Growing optimism over the resumption of the US-China trade talks continued boosting the global risk sentiment, which was evident from a bullish mood around equity markets and weighed on the Swiss Franc's safe-haven status.
 
The risk-on mood allowed the US Treasury bond yields to continue with their recent up-move, which further extended some support to the US Dollar and collaborated to the pair's momentum to the highest level since early-August.
 
The pair has now moved within the striking distance of the very important 200-day SMA, which if cleared decisively will be seen as a key trigger for bullish traders and set the stage for a further near-term appreciating move.
 
Moving ahead, Wednesday's US economic docket - highlighting the release of Producer Price Index (PPI) for August - will be looked upon for some short-term trading opportunities later during the early North-American session.

Technical levels to watch