- The US Dollar Index remains on track to close the second day in a row in the red.
- USD/CHF finds support near 0.9830.
- Wall Street suggests a mixed market sentiment.
The USD/CHF pair advanced toward the 0.99 handle in the early NA session before losing its traction and dropping to a daily low of 0.9830. With the markets quieting down in the last couple of hours, the pair has gone into a consolidation phase and was last seen trading at 0.9850, losing 0.3% on the day.
The pair’s upsurge was fueled by the rising demand for the greenback on the back of upbeat macroeconomic data releases from the United States. The data released by Markit Economics and the ISM both showed that the activity in the non-manufacturing sector continued to expand at a robust pace. The US Dollar Index rose to a fresh session high at 94.30 following the data but failed to stick to its gains as European currencies stole the spotlight.
A Bloomberg report citing sources familiar with the matter claimed that the ECB policymakers were going to have a live discussion regarding a possible QE exit strategy at the June 14 meeting.
On the other hand, major equity indexes in the United States are having a difficult time finding direction, pointing to a neutral market sentiment. As of writing, the Dow Jones Industrial Average was down 0.1% while the S&P 500 was up 0.1%.
On Wednesday, the CPI from Switzerland going to be released. Markets expect the inflation to rise 0.3% and 0.9% on a monthly and yearly basis. Nonetheless, the DXY fluctuations are likely to drive the pair’s price action.
Technical outlook
The pair could encounter the first technical support at 0.9830/25 (daily low/May 31 low) ahead of 0.9800 (psychological level/100-WMA) and 0.9770 (Apr. 24 low). On the upside, resistances align at 0.9910 (Jun. 1 high) 1.0000 (psychological level/parity) and 1.0055 (May 10 high).
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