USD/CHF turns negative below mid-0.97s as DXY drops to session lows

After advancing to its highest level since May 30 at 0.9785, the USD/CHF reversed course in the early NA session and erased its daily gains. As of writing, the pair was trading at 0.9743, losing 0.04% on the day.

With no significant macroeconomic data releases on Tuesday, the pair's price action is being driven by the US Dollar Index's movements. The DXY, which refreshed its 7-week peak at 93.78 earlier in the day, lost its traction in the NA session and turned negative below mid-93. At the moment, the index was at 9.37, down 0.12% on the day.

Although no major catalysts were apparent behind the index's drop, the fact that the NY ISM Business Conditions Index eased to 49.7 in September from 56.6 in August may have weighed on the greenback. Moreover, the yield on the 10-year T-bond recently gave up its daily gains and turned flat at 2.33%, pressuring the positively correlated US Dollar Index.

In the meantime, major equity indexes in the U.S. started the day mixed with the Dow Jones pushing higher to a record top and the S&P 500 recording modest losses, helping the traditional safe-haven CHF remain resilient against the buck.

• US stocks continue scaling higher, clock fresh record highs

With no more data left in the remainder of the day, the pair is likely to fluctuate in accordance with the US Dollar Index. 

Technical outlook

The initial hurdle for the pair could be seen at 0.9800 (psychological level/May 29 high) ahead of 0.9850 (May 17 high) and 0.9935 (Apr. 23 high). On the downside, supports are located at 0.9680 (Oct. 2 low), 0.9635 (100-DMA/50-DMA) and 0.9565 (Sep. 15 low).