USD/CHF rises toward 0.96 after US GDP report

The USD/CHF pair corrected its daily losses and turned flat at 0.96 after the GDP data from the U.S. but failed to gather further bullish momentum. At the moment, the pair is trading at 0.9590, losing 0.07% on the day.

According to the data released by the Bureau of Economic Analysis, the third estimate of the real GDP growth in the U.S. increased to 1.4% from 1.2% and beat the market consensus of 1.2%. Additionally, further details of the report showed that with the third estimate for the first quarter, personal consumption expenditures (PCE) and exports increased more than previously estimated. 

• US: Real GDP increased at an annual rate of 1.4% in the first quarter of 2017

With the initial reaction to the data, the US Dollar Index leaped to its session high at 95.73 and corrected a big portion of its daily losses, lifting the USD/CHF to its opening level. However, the index struggled to extend its rise as investors remain hesitant on taking long USD positions. It might take more than a single positive data to convince the market participants that the greenback had been oversold. At the moment, the US Dollar Index is at 95.60, losing 0.18% on the day. 

Moreover, investors may be taking a cautious approach ahead of the speech by St. Louis Fed President James Bullard, who adopted a dovish tone in his last couple of statement. 

Technical outlook

The RSI indicators on the daily and the 4-hour charts continue to show oversold readings and suggest that the pair could have a difficult time falling deeper. A daily close above 0.9600 (psychological level) could allow a correction move towards 0.9640 (Jun. 28 high) and 0.9695/0.9700 (20-DMA/psychological level). On the downside, near-term supports could be seen at 0.9565 (daily low), 0.9550 (Nov. 9 low) and.9500 (psychological level).