USD/CHF extends gains above 0.96 on greenback strength

The USD/CHF pair gathered momentum in the early NA session and renewed its daily high at 0.9678. As of writing, the pair was trading at 0.9675, earning 60 pips, or 0.62%, on the day.

The pair's recent upsurge seems to be fueled by an increasing demand for the greenback. After the data released by the Federal Reserve Bank of Philadelphia showed that the diffusion index for current general activity advanced to its highest level since April at 30.7 in August, the US Dollar Index edged higher to its best level of the day at 93.50. At the moment, the DXY was at 93.37, up 0.4% on the day. However, the other data, the Housing Price Index, from the U.S. came in at 0.1%, missing the market estimate of 0.4% and capped the gains of the index for now.

• Philly Fed: Firm-level general activity index rose to its highest reading in 4 months

The only data left from the U.S. will be the Richmond Fed Manufacturing Index, due to be released at the top of the hour. On the other hand, major equity indexes in the U.S. started the day higher, suggesting that the traditional safe-haven CHF could have a difficult time retrace its losses against the greenback.

Technical outlook

The pair could encounter the first technical resistance at 0.9670 (20-DMA) ahead of  0.9715 (100-DMA) and 0.9825 (May 18 high). On the downside, supports could be seen at 0.9585 (Aug. 18 low), 0.9500 (psychological level) and 0.9440 (Jul. 21 low). The RSI indicator on the daily graph recently surpassed the 50 mark, suggesting that the bullish momentum is building up.