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USD/CHF pushes higher above mid-0.98s as USD gains traction

  • DXY rises to fresh daily highs above 93.
  • Trade deficit widens in the United States.
  • US Stocks point to a positive start. 

After spending the majority of the European session trading in a tight 20-pip range on Tuesday, the USD/CHF pair gained traction in the early American session and touched its highest level since November 30 at 0.9875. The pair was last seen trading a couple of pips below that level and was gaining 0.23% on the day.

 US trade balance fails to meet expectations

According to the data released jointly by the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, the goods and services deficit rose to $48.7 billion in October from $44.9 billion in September. During that time period, exports increased by $97.5 billion, or 5.3%. while imports increased by $146.6 billion, or 6.5%. Despite the widening deficit, however, the US Dollar Index gathered momentum and advanced to 93.40. As of writing, the index was at 93.36, up 0.33% on the day.

The greenback seems to be receiving support from the U.S. Treasury-bond yields on the day. The 10-year reference is up 1% at 2.387% at the moment. In the meantime, following yesterday's mixed session, major equity indexes are up in pre-market trading. A positive start in Wall Street could provide an additional boost to the pair.

Later in the session, Markit is going to announce its Composite and Services PMI data fro the United States. In case the data come in upbeat, the DXY could continue to try to stretch its gains and allow the bullish momentum stay strong.

Technical levels to consider

The pair could encounter the immediate resistance at 0.9880 (50-DMA) ahead of 0.9945 (Nov. 21 high) and 1.0000 (psychological level). On the downside, supports align at 0.9855 (20-DMA), 0.9800 (psychological level) and 0.9760 (100-DMA). 

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