USD/CHF extends gains as the USD holds firm

• USD/CHF approached 0.8960, seen 0.30% gains.

• ZEW survey figures from Switzerland from October revealed that expectations worsened.

• Housing data from the US came in better than expected.

During Wednesday's trading session, the USD/CHF witnessed a consecutive two-day increase, surging towards the 0.8960 mark. Boosted by positive Housing Market data and higher US yields, the US dollar experienced increased demand. Conversely, the Swiss franc appears to be losing strength due to underwhelming expectations data from Switzerland.

In line with that, the U.S. Census Bureau revealed that the New Home Sales from September lived up to the expectations. The headline figure came in at 0.759M, above the consensus of 0.68M and increased in relation to its last reading of 0.676M. Elsewhere, the 5 and 10-year Treasury bond yields are sharply rising, seeing increases of more than 1%, standing at 4.91% and 4.95% and seems to be making the USD gaining interest. However, hawkish bets on the Federal Reserve (Fed) for the rest of 2023 still remain low so the upside for the US rates are limited for the short term.

That being said, the Gross Domestic Product (GDP) preliminary estimates from Q3 on Thursday and Personal Consumption Expenditures (PCE) figures from September on Friday will give investors further insights into the US economy, which could affect the bets on the next Feds decisions.

On the other hand, the ZEW Expectations survey from Switzerland from October plunged to -37, as expected, and the gloomy outlook of the Swiss economy seems to have weakened the CHF.

USD/CHF Levels to watch

Based on the daily chart analysis, the USD/CHF technical perspective remains neutral to bullish. The bullish investors are regaining their position, while the bearish ones are consolidating the recent decline. The Relative Strength Index (RSI) is currently located below the midline but showing a positive trend, and the Moving Average Convergence (MACD) displays weaker red bars.

Support levels: 0.8895 (100-day SMA), 0.8870, 0.8850.

Resistance levels: 0.8970,0.900 (200-day SMA), 0.9040.

USD/CHF Daily Chart