USD/CHF is expected to trade with a bullish bias. The pair posted a strong rebound last Friday, and is heading upward toward its next resistance at 0.9805. The 20-period and 50-period moving averages are well directed, and maintain a bullish outlook. Furthermore, the relative strength index is positive above its neutrality area at 50, and is also displaying strong bullish momentum. A support base at 0.9685 has formed, and the downside potential should be limited. On Friday, U.S. indices closed mixed after the Fed hinted at a possible rate increase later this year. The Dow Jones Industrial Average fell 53 points (0.3%) to 18395, the S&P 500 shed 3 points (0.2%) to 2169, while the Nasdaq Composite gained 7 points (0.1%) to 5219.
On the economic data front, the second reading of U.S. 2Q annualized GDP improved by 1.1%, in-line with forecasts, revised from a rise of 1.2% in the first reading. At Jackson Hole, the Chairwoman of the Federal Reserve, Janet Yellen, took the time to discuss the recent monetary policy framework, stating that the solid performance of the labour market and the improved expectations of the economic activity have improved the chances of a potential increase in the federal funds rate.
To sum up, as long as 0.9685 holds as a support, look for further advance to 0.9805 and even to 0.9845 as likely.
Resistance levels: 0.9805, 0.9845, 0.99
Support levels: 0.9650, 0.9620, 0.9590
The material has been provided by InstaForex Company – www.instaforex.com
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