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  • US Dollar Index steadies above 97 in the second half of the day.
  • Easing trade concerns boost the market sentiment.
  • Coming up: Markit and ISM Manufacturing PMI data from the U.S.

Following a drop to the 0.9960 area earlier in the day, the USD/CHF pair reversed its course and rose toward the critical parity mark. As of writing, the pair was trading at 0.9995, adding 0.15% on a daily basis.

Although the broad-based USD weakness weighed on the pair during the Asian and the early European session, the stronger risk appetite didn’t allow the CHF to continue to gather strength. Major European indices gained traction on Monday after the U.S. and China agreed to pause additional tariffs on each other to reflect the improved market sentiment today. At the moment, Germany’s DAX is up more than 2% on the day while the UK’s FTSE 100 is adding 1.6%.  

If Wall Street reacts positively and extends its rally after closing the previous week on a positive note, the pair could continue to push higher in the second half of the day.

Meanwhile, after opening the week with a bearish gap, the US Dollar Index didn’t have a difficult time surpassing the 97 handle ahead of the data and provided extra support to the pair’s rise. Later in the session, both the IHS Markit and the ISM will be releasing their Manufacturing PMI reports.  

Technical levels to consider

With a decisive break above 1.0000 (psychological level/parity), the pair could target 1.0065 (Nov. 5 high) and 1.0130 (Nov. 13 high). On the downside, supports are located at 0.9980 (50-DMA), 0.9925 (Nov. 28 low) and 0.9895 (200-DMA).