USD/CHF is expected to keep momentum as the bias remains bullish. The pair is trading above its 20-period and 50-period moving averages. The relative strength index is above its neutrality area at 50 and lacks downward momentum. A support base at 0.9790 has formed and should limit the downward attempts. On the economic data front, MBA mortgage applications improved by 2.8% in week ended August 26th from a fall of 2.1% in the previous week. On the other hand, ADP employment change fell to 177k in August (estimated 175k) compared to 194k in July (revised from 179k). Separately, the Chicago purchasing manager index decreased in August to 51.5 (forecasted 54) from 55.8 in the previous month. In other reports, pending home sales increased by 1.3% MoM in July (estimated 0.7%) from a decline of 0.8% in June (revised from +0.2%).
In conclusion, as long as this level holds on the downside, we are still positive with an up target at 0.9900. A break above this level would open the way to further upside toward the next resistance at 0.9945.
Resistance levels: 0.9900, 0.9945, 0.9975
Support levels: 0.9760, 0.9735, 0.9685
The material has been provided by InstaForex Company - www.instaforex.com