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  • US Dollar Index erases daily losses post macro data releases.
  • Annual core-PCE Price Index falls short of market expectations.
  • Wall Street starts the day on a positive note.

The USD/CHF pair fell to its lowest level since July 9 at 0.9868 in the early NA session but quickly retraced its losses to turn positive on the day near the 0.99 handle. As of writing, the pair was up 0.12% on the day at 0.9893.

Today’s data from the U.S. showed that the core-PCE Price Index, the Fed’s preferred measure of inflation, rose by 1.9% in June to match May’s reading, which was revised down to  1.9% from 2%. Despite the disappointing inflation numbers, the greenback gathered strength as the underlying details of the report showed that personal spending and personal income both grew by 0.4% on a monthly basis in June. The DXY quickly reversed its course after touching a session low of 94.16 and was last seen at 94.48, where it was up 0.14% on the day.

In the meantime, news of Chinese and American officials looking to reach a deal and avoid the trade war boosted the risk-appetite in the early NA session to help the pair preserve its bullish momentum. At the moment, the Dow Jones Industrial Average and the S&P 500 are up 0.4% and 0.3% on the day respectively.

There won’t be any other macroeconomic data releases from the United States in the remainder of the day, and the risk perception is likely to stay as the primary driver of the pair’s price action as the DXY could struggle to make sharp moves ahead of tomorrow’s critical FOMC meeting.

Technical outlook

With a daily close above 0.9900 (psychological level/100-DMA), the pair could target 0.9950 (20-DMA) and 1.000 (parity level). On the downside, supports could be seen at 0.9870 (daily low), 0.9825 (Jun. 14 low) and 0.9785 (Jun. 7 low).