USD/CHF stays near parity ahead of PCE inflation data

• Risk-positive mood weighs on safe-havens on Monday.
• US Dollar Index sticks to modest gains around mid-96s.
• Coming up: US PCE price index, personal income/spending data.

After spending the majority of the Asian session in a tight range near 0.9980, the USD/CHF pair gained traction in the early European morning and rose above the critical parity mark. With markets getting ready for the September PCE price index data, the Federal Reserve preferred gauge of inflation, from the United States, the pair is moving sideways near 1.0000, adding 0.3% on a daily basis.

Although the first half of the day didn’t offer any significant macroeconomic data releases, a strong rebound witnessed in European equity indexes suggested that the market sentiment has improved on Monday. At the moment, both Germany’s DAX and the UK’s FTSE are gaining 2%. In addition to the data from the U.S., Wall Street’s performance could also act as a catalyst in the NA session.

Later in the session, Chicago Fed President Charles Evans, who earlier this month stated that he was comfortable with another rate hike in December, will be delivering a speech. Furthermore, Dallas Fed is going to publish the findings of its manufacturing business survey.

Technical levels to consider

The pair could encounter the first resistance at  1.0025 (Oct. 26 high) ahead of 1.0070 (Jul. 13 high) and 1.0100 (psychological level). Below 1.000 (parity), 0.9940 (20-DMA) could come as the initial support ahead of 0.9850 (Oct. 15 low).