USD/CHF inches closer to 0.97 as DXY holds on to recovery gains

The USD/CHF pair is preserving its bullish momentum in the early NA session on Monday and moves closer to the 0.97 handle. As of writing, the pair was at 0.9687, gaining 0.73%, or 70 pips, on the day.

The pair's upsurge on Monday seems to be a product of the greenback strength and an improved market sentiment. With no further headlines over the weekend that escalated the geopolitical tensions between the United States and North Korea, investors looked keen to move away from safe-havens, which found solid demand throughout the previous week. Robust gains witnessed in the major European equity indexes are likely to push the Wall Street higher at the opening, providing an additional boost for the pair.

On the other hand, the US Dollar Index, which recorded small losses in the previous week, is taking advantage of the empty economic calendar on Monday and is making a technical bullish correction. At the moment, the index is at 93.22, up 0.25% on the day. 

Technical outlook

With the pair adding more than 70 pips on the day, the RSI indicator on the daily graph is moving towards the 70 mark, suggesting that the bullish momentum is building up in the short-term. 0.9640 (20-DMA) could be seen as the initial technical support ahead of 0.9490 (Jul. 27 low) and 0.9400 (psychological level).On the upside, resistances align at 0.9700 (psychological level), 0.9770 (Aug. 8 high) and 0.9825 (May 18 high).

• USD/CHF remains under pressure – Commerzbank