After starting the day with a 30-pip bullish gap, the USD/CHF pair preserved its bullish momentum and easily rose above the 0.95 mark to refresh its daily high at 0.9536. As of writing, the pair was trading at 0.9530, gaining nearly 1% on the day.
The pair's upsurge on Monday seems to be fueled by a positive market sentiment and the greenback's decisive recovery. After plummeting to its lowest level in nearly 32 months at 90.99 during the early trading hours of Friday, the US Dollar Index is now rising towards the 92 handle. At the moment, the index was at 91.75, adding 0.47% on the day.
On the other hand, the demand for safe-havens weakened on Monday as fears over North Korea and the potential negative financial impact of Hurricane Irma eased. Instead of testing another ballistic missile, North Korea held a massive celebration on its founding day on Saturday. In addition, over the weekend, Irma lost strength and was downgraded to a tropical storm in the morning on Monday, further boosting the risk appetite. As of writing, the Dow Jones Industrial Average and the S&P 500 were both up around 0.6%.
Commenting on the performance of global equity indexes, “for now, we’re seeing a bit of a relief rally. It does appear that the worst-case scenario for Florida has been evaded,” Peter Cardillo, chief market economist at First Standard Financial in New York, told Reuters. With no significant data scheduled to be released in the remainder of the day, the pair is likely to track the movements of the major stock markets in the US.
Technical outlook
The pair could face the first technical resistance at 0.9575 (20-DMA) ahead of 0.9645 (100-DMA) and 0.9700 (psychological level/Aug. 23 high). On the downside, supports could be seen at 0.9500 (psychological level), 0.9430 (Aug. 29 low) and 0.9400 (psychological level). The RSI indicator on the H4 chart is now pushing higher above the 50 mark, suggesting that the bullish momentum is likely to extend in the short-term.
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