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  • US Dollar Index advances to monthly highs above 95.70 on Tuesday.
  • Risk aversion  helps CHF stay resilient against the buck.
  • FOMC Chairman Jerome Powell to speak on employment and inflation later in the day.

The USD/CHF is having a hard time setting its next short-term direction as the risk-off mood doesn’t allow the pair to take advantage of the broad-based USD strength. As of writing, the pair was trading at 0.9840 and was virtually unchanged on the day.

Earlier today, concerns over Italian budget crisis and the uncertainty surrounding Brexit negotiations weighed on the euro and the GBP and helped the greenback find demand. The US Dollar Index, which has been preserving its bullish momentum since last Wednesday’s FOMC meeting, rose to its highest level since early September at 95.74 before going into a consolidation phase and was last seen up 0.3% on the day at 95.58.

Later in the NA session, FOMC Chairman Jerome Powell is scheduled to deliver a speech on the outlook for employment and inflation at the National Association for Business Economics in Boston. The only macroeconomic data featured in the calendar will be the ISM NY Business Conditions Index.

Technical outlook

Despite today’s subdued price action, the pair continues to float around its five-week highs and the RSI indicator on the daily chart shows that there is still some room on the upside before the pair becomes technically oversold. Resistances for the pair could be seen at  0.9850 (100-DMA/daily high) ahead of 0.9900 (psychological level) and 0.9905 (Aug. 21 high). On the downside, supports are located at 0.9780 (50-DMA), 0.9750 (200-DMA) and 0.9685 (20-DMA).