USD/CHF is expected to prevail its upside movement. The pair broke above a declining trend line, which emerged on July 25, and accelerated on the upside. The rising 50-period moving average is playing a support role and maintains the upside bias. The relative strength index stands firmly above its neutrality level at 50 and lacks downward momentum. On the US economic data front, the Markit Services PMI dropped to 50.9 in a preliminary estimate in July (vs. 52 expected) from 51.4 in June, while the Composite PMI edged up to 51.5 in July from 51.2. The Consumer Confidence Index remained relatively stable at 97.3 in July (vs. 96 expected). The Richmond Federal Manufacturing Index jumped to 10 in July (vs. -5 expected) from -10 in June. Separately, new home sales increased to 592,000 units in June (vs. 560,000 units expected) from 572,000 units in May.

Additionally, a support base is formed around 0.9875, which should limit the downside potential. As long as this key level is not broken, look for further upside movement towards 0.9955 and 0.9975 in extension.

Resistance levels: 0.9955, 0.9975, 1.0045

Support levels: 0.9840, 0.9815, 0.9780