Following the upbeat macro data from the United States, the USD/CHF pair, which spent the majority of the day moving sideways above the 0.97 handle, gathered momentum and erased all of its daily losses. As of writing, the pair was trading at 0.9750, up 0.27% on the day.
Today's data revealed that according to the second estimate, the real GDP growth in the U.S. in the first quarter of 2017 improved to 1.2% from 0.7% in the fourth quarter of 2016. Although the report said that the general picture of economic growth remained the same, the fact that the personal consumption expenditures continued to increase suggested that the economy is in good shape.
- US: Real GDP increased at an annual rate of 1.2% in the first quarter of 2017
- US: The PCE price index increased 2.4% in first quarter of 2017
Other data showed that following the strong increase in March, the durable goods orders contracted by 0.7% but still came in above the expectation of -1.4%. Fueled by the solid data, the US Dollar Index reached its weekly high at 97.42, pushing the pair higher. As of writing, the index was at 97.36, up 0.23% on the day. At the top of the hour, University of Michigan will release its Consumer Sentiment survey result for May. A positive reading, coupled with a higher risk appetite could continue to support the pair's upsurge.
Technical outlook
Despite this recent rise, the pair remains in a horizontal channel on the daily graph. However, the RSI on the H4 chart is trying to break above the 50 line, suggesting that a short-term bullish momentum is building up. 0.9775 (May 24 high) could be seen as the first technical resistance for the pair ahead of 0.9850 (May 17 high) and 0.9900 (psychological level). On the downside, supports align at 0.9700 (psychological level/daily low) ahead of 0.9640 (Sept. 29 low) and 0.9600 (psychological level).
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