USD/CHF recovers above 0.97 as DXY sticks to daily gains

• US Dollar Index starts the week on a positive note.
• NA traders will be enjoying the Labor Day holiday on Monday.

After dropping to its lowest level in nearly four months near mid-0.96s on Friday, the USD/CHF started retracing last week's losses on Monday and rose above the 0.97 mark. As of writing, the pair was trading at 0.9707, adding 0.18% on the day.

The US Dollar Index, which recovered the majority of its weekly losses on Friday as the greenback took advantage of the safe-haven flows, stays in the positive territory on Monday. The fact that there won't be any macroeconomic data releases from the United States in the second half of the day is likely to help the dollar preserve its modest gains. At the moment the DXY is up 0.06% on the day at 95.16.

On Tuesday,  the Swiss Federal Statistical Office is going to release the CPI figures, which is expected to stay unchanged at 1.2% on a yearly basis in August. The economic docket in the United States will feature the IBD/TIPP Economic Optimism Index and the IHS-Markit's and the ISM's final Manufacturing PMI readings. The most significant macroeconomic data from the U.S. this week will be the Non-farm payrolls, which will be released on Friday.

Technical outlook

Despite today's recovery, the RSI indicator on the daily chart stays below the 30 handle, suggesting that the pair is still technically oversold and could continue to extend its move higher. Resistances could be seen at 0.9730 (200-DMA), 0.9810 (Aug. 28 high) and 0.9900 (50-DMA/psychological level). On the downside, supports are located at 0.9650 (Aug. 31 low), 0.9580 (Apr. 17 low) and 0.9500 (psychological level).