USD/CHF extends gains as the USD holds firm

In Wednesday’s session, the USD/CHF saw gains for a second consecutive day, jumping towards 0.8960. On the USD side, positive Housing Market data and higher US yields made the green currency find demand. On the other hand, weak expectations data from Switzerland seems to be weakening the CHF.

In line with that, the U.S. Census Bureau revealed that the New Home Sales from September lived up to the expectations. The headline figure came in at 0.759M, above the consensus of 0.68M and increased in relation to its last reading of 0.676M. Elsewhere, the 5 and 10-year Treasury bond yields are sharply rising, seeing increases of more than 1%, standing at 4.91% and 4.95% and seems to be making the USD gaining interest. However, hawkish bets on the Federal Reserve (Fed) for the rest of 2023 still remain low so the upside for the US rates are limited for the short term.

That being said, the Gross Domestic Product (GDP) preliminary estimates from Q3 on Thursday and Personal Consumption Expenditures (PCE) figures from September on Friday will give investors further insights into the US economy, which could affect the bets on the next Fed’s decisions. 

On the other hand, the ZEW Expectations survey from Switzerland from October plunged to -37, as expected, and the gloomy outlook of the Swiss economy seems to have weakened the CHF.

  
USD/CHF Levels to watch 

 According to the daily chart, the technical outlook for the USD/CHF remains neutral to bullish as the bulls are recovering ground while the bears consolidate the recent downward movements. The Relative Strength Index (RSI) still resides below midline, but with a positive slope, while the Moving Average Convergence (MACD) exhibits weaker red bars. 

Support levels: 0.8895 (100-day SMA), 0.8870, 0.8850. 

Resistance levels: 0.8970,0.900 (200-day SMA), 0.9040.

USD/CHF Daily Chart