USD/CHF is giving away recent gains with 0.8630 support coming closer

• The Dollar is on the defensive weighed by Fed cuts hopes.
• The escalating tensions in the Middle East are supporting the safe-haven CHF.
• Friday´s PCE Prices Index data will provide more cues about the Fed´s policy outlook.

The US Dollar is losing ground for the second consecutive day on Tuesday. The positive market sentiment with investors still celebrating the end of the Fed´s tightening cycle is weighing on the Greenback with all eyes on Friday´s UPCE Prices Index data.

The recent hawkish comments by Fed officials have failed to provide significant support for the USD. On Monday, Investors remain confident that the bank will start easing in March despite Chicago Fed President Austan Goolsbee´s comments denying any commitment to cut rates soon.

Beyond that, tensions in the Middle East are escalating, which has forced shipping firms to reroute their vessels to avoid the Suez Canal, underpinning support on the safe-haven CHF.

On Friday, an array of US indicators, namely the US PCE Prices index will provide some more info about the Federal Reserve´s rate outlook and might give a fresh impulse to the US Dollar.

The technical picture remains bearish, with price action approaching 0.8630 lows. Beyond here, the 2023 low at 0.8555 will be exposed. Resistances are at 0.8720 and 0.8810.
 

Technical levels to watch