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Oct 17, 2017 03:54 PM

USD/CHF inches higher toward 0.98 on upbeat US-data

After losing its momentum in the early European session and retreating from its weekly high of 0.9792, the USD/CHF pair gained traction at the beginning of the NA session and is now rising towards the 0.98 handle. At the moment, the pair is at 0.9788, adding 0.35% on the day.

The pair's recent upsurge seems to be fueled by a fresh USD-buying wave that hit the markets following the macroeconomic data releases from the United States. According to the data released by the U.S. Bureau of Labor Statistics, import prices increased 0.7% on a monthly basis in September and lifted the annual rate to 2.7% from 2.1% in August. "The last time import prices advanced by more than 0.7 percent was a 1.2-percent increase in May 2016," the report noted. Moreover, export prices edged higher to 0.8% from 0.6% on a monthly basis in September.

  • US: Import prices rise 0.7% in Sept on higher fuel prices; export prices increase 0.8%

Boosted by the data, the US Dollar Index advanced to its highest level since October 10 at 93.45. At the moment, the index is at 93.44, up 0.33% on the day.

Later in the session, the economic docket in the United States will feature industrial production and capacity utilization. A higher-than-expected reading could allow the DXY push higher and help the pair crack through the 0.98 handle.

Technical outlook

With today's modest rise, the RSI indicator on the daily graph turned north above the 50 mark, suggesting that the bullish momentum is building up. A decisive advance above 0.9800 (psychological level) could open the door for further gains toward 0.9835 (Oct. 6 high) and 0.9900 (psychological level). On the downside, the first technical support aligns at 0.9775 (200-DMA) ahead of 0.9700 (psychological level) and 0.9640 (100-DMA).