USD Surges Against CHF, But Gains Seen Limited by Overbought Conditions

The US Dollar has surged over the past two days against the Swiss Franc, reaching a high of 0.8296 yesterday, according to UOB's Quek Ser Leang and Lee Sue Ann. They note that the strong momentum points to further USD strength, but warn that deeply overbought conditions are likely to cap upside.

The analysts highlight that support is at 0.8270, while a breach of 0.8255 would indicate easing of immediate upward pressure. In their 1-3 weeks view, they revised their stance from positive to neutral on Tuesday (22 Sep), indicating that USD is likely to trade in a range between 0.8155 and 0.8255.

The upside risk remains intact as long as USD holds above 0.8225, which they consider a 'strong support' level. The analysts also suggest that the broader rebound lacks momentum to revisit the July peak.