- Greenback valuation drives the USD/CHF pair’s price action on Wednesday.
- Fed Chairman Powell is scheduled to deliver remarks in the second day of testimony.
- European equity indices are recording modest gains.
After closing the previous day a couple of pips above the critical parity mark, the USD/CHF pair extended its upside to a fresh session top at 1.0033 but failed to preserve its momentum. As of writing, the pair was trading at 0.9996, losing 0.05% on the day.
Following dismal inflation reading from the euro area and the UK earlier today, the shared currency and the GBP started losing value against the greenback and helped the US Dollar Index rise above the 95 mark to touch its best level since June 28 at 95.18. Ahead of the macroeconomic data releases and the Fed Chairman Jerome Powell’s testimony before the Congress, the index is still up 0.4% at 95.09.
In the meantime, the improved sentiment on Wednesday put some extra weight on traditional safe-havens such as the CHF. Germany’s DAX and the UK’s FTSE indexes are both up 0.6% at the moment and are likely to cause Wall Street to open higher. A positive sentiment surrounding US stocks could help the pair limit its losses.
Technical levels to consider
The pair could face the first technical support at 0.9950 (20-DMA) ahead of 0.9915 (50-DMA) and 0.9860 (Jul. 9 low). On the upside, resistances align at 1.0000 (psychological level/parity), 1.0065 (Jul. 13 high) and 1.0100 (psychological level).
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