USD/CHF extends gains above 0.96 on tax reform news
|Despite a lack of significant macro data releases, the USD/CHF pair gathered momentum in the first half of the NA session and pushed higher to its 12-day peak at 0.9646. As of writing, the pair was trading at 0.9639, up 0.43% on the day.
U.S. House Ways and Means Committee Chair Kevin Brady on Wednesday announced that they were planning to release the tax plan on the week of September 25 and further added that the aim was for House & Senate to complete budget process my mid-October. Moreover, speaking in Capitol Hill, Paul Ryan, Speaker of the U.S. House of Representatives, said that he was confident that US President Trump would push for a conservative tax reform. On the back of these remarks, the greenback gained strength against its peers, allowing the US Dollar Index to make a decisive break above the 92 mark. At the moment, the DXY was at 92.30, up 0.45% on the day.
Today's data from the U.S. showed that the PPI grew less than expected in August, but was largely ignored by the investors.
In the meantime, major equity indexes in the U.S. started the day in a relatively calm manner with the Dow Jones Industrial Average and the S&P 500 both staying flat near their opening levels. In case stocks gain traction in the remainder of the session, the pair could extend its upside as the safe-haven CHF would continue to face a selling pressure.
Technical outlook
With today's rise, the RSI indicator on the daily graph started to move higher from the 50 handle towards the 70 mark, suggesting that the bullish momentum is building up. The initial hurdle for the pair aligns at 0.9645 (100-DMA) ahead of 0.9700 (psychological level/Aug. 23 high) and 0.9765 (Aug. 16 low). On the downside, supports could be seen at 0.9610 (50-DMA), 0.9575 (20-DMA), 0.9500 (psychological level).
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