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  • Annual core PCE price index stays unchanged at 2%.
  • Italy worries weigh on the market sentiment on Friday.
  • US Dollar Index clings to gains above 95.

After closing the first four days of the week with gains, the USD/CHF pair lost its traction on Friday as the Italian political drama triggered a flight-to-safety and helped the Swiss franc gather strength against its peers. Following a drop to 0.9738, however, the broad-based USD strength pushed the pair back above mid-0.97s. As of writing, the pair was trading at 0.9757, losing 0.15% on the day.

Today’s data from the U.S. showed that the annual core PCE price index, the Fed’s preferred gauge of inflation, stayed unchanged at 2% in August to match the previous reading and analysts’ estimates. Commenting on the data, “Now that the Federal Reserve has achieved its inflation goal, its rate objective must be ‘normalization’.  But what is a  neutral rate these days? Not even the Fed knows. All the governors can do is increase and watch the results,” FXStreet Senior Analyst Joseph Trevisani said.

Other details of the report revealed that personal spending growth ticked down to 0.3% from 0.4% and personal income increased by 0.3%. The US Dollar Index, which touched its highest level since September 10 at 95.37 earlier today, was last seen at 95.26, adding 0.3% on the day.

Later in the session, Chicago PMI and the UoM Consumer Sentiment Survey will be looked upon for fresh impetus.

Technical levels to consider

The pair could face the first technical resistance at 0.9785 (50-DMA) ahead of 0.9850 (100-DMA) and 0.9900 (psychological level). On the downside, supports could be seen at 0.9750 (200-DMA), 0.9670 (20-DMA) and 0.9620 (Sep. 26 low).