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USD/CHF tests parity as DXY remains above 95 handle

  • Greenback gains traction following yesterday's technical correction.
  • Market sentiment is likely to impact the price action with no significant data releases.
  • Federal Reserve Chair Janet Yellen is scheduled to speak later in the session.

The USD/CHF pair, which closed the day with a 25-pip loss on Monday, is in a recovery mode on Tuesday as the buck gathers strength against its peers. At the moment, the pair is trading at 0.9998, adding 0.25% on the day.

USD continues to drive the price action

After rising to a fresh daily high at 1.0020 during the European trading hours, the pair struggled to extend its upside and erased a portion of its gains as the negative mood surrounding the major European equity indexes helped the CHF find demand as a safe haven. At the moment, the German DAX and the UK FTSE indexes are losing 0.05% and 0.25% respectively. However, a steady rise witnessed in the US Dollar Index allowed the pair to gain traction ahead of the NA session opening. As of writing, the DXY was up 0.42% on the day at 95.04.

Later in the session, IBD/TIPP Economic Optimism Index and JOLTS Job Openings data from the U.S. will be looked upon for fresh impetus ahead of Federal Reserve Chair Janet Yellen's speech at the "Presentation of the Paul H. Douglas Award for Ethics in Government" in Washington at 19:30 GMT. Although Yellen is not expected to deliver any remarks on the monetary policy outlook, investors will be following the event closely.

Technical outlook

The RSI indicator on the daily graph turned north towards the 70 mark on Tuesday, suggesting that the bullish momentum is building up. The first technical resistance for the pair aligns at 1.0040 (Oct. 27/Nov. 1 high) ahead of 1.0080 (May 12 high) and 1.0155 (Mar. 8 high). On the downside, supports could be seen at 0.9970 (daily low), 0.9915 (20-DMA) and 0.9780 (50-DMA).

  • USD/CHF stays focused on 1.0039 – Commerzbank

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