USD/CHF extends gains to fresh multi-month peaks above 0.97

The USD/CHF pair is preserving its bullish momentum on Wednesday as the buck continues to gather strength against its peers. The USD/CHF pair, which recently touched its highest level since May 30 at 0.9770, is now trading at 0.9766, gaining 0.8% on the day.

The ongoing USD rally seems to be the primary driver behind the pair's upsurge on Wednesday. Following Fed Chairwoman Yellen's comments yesterday in the NA session, the US Dollar Index struggled to stay above the 93 handle but still closed the day with substantial gains. The index started the day on a positive note on Wednesday and refreshed its monthly high at 93.42 as investors resume pricing the probability of a December rate hike, which is now at 76.4% according to the CME Group FedWatch Tool.

Moreover, today's data released by the U.S. Census Bureau showed that new orders for manufactured durable goods increased 1.7% on a monthly basis in August after contracting 6.8% in July and beat the market estimate of 1%, providing an additional boost to the greenback.

• US: New orders for manufactured durable goods in Aug increased 1.7% to $232.8 bln

In the meantime, Germany's DAX and the UK's FTSE indexes are up 0.5% and 0.4% respectively, suggesting that Wall Street could adopt a positive tone as well. The positive market sentiment in the NA session could push the pair higher as the safe-haven CHF is likely to suffer from the risk-on mood. 

Technical outlook

The initial resistance 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 could be seen at 0.9700 (psychological level/daily low), 0.9635 (100-DMA/50-DMA) and 0.9565 (Sep. 15 low).