USD/CHF edges higher toward 0.98 as DXY rises above 92

• US Dollar starts the week on a positive note.
• Market sentiment is likely to be the next catalyst.

After finishing the previous week virtually unchanged, the USD/CHF pair gained traction on Monday as greenback started to gather strength against its peers. As of writing, the pair was trading at 0.9783, adding 0.35% on the day.

Following the mixed reaction to the critical NFP report last Friday, the US Dollar Index started the week with a small bearish gap but easily reversed course and recently broke above the 92 mark for the first time since December 29. At the moment, the index is at 92.06, up 0.35% on the day. Despite a lack of fresh fundamental drivers that were seen fueling the DXY's rise on Monday, the greenback is finding demand amid heightened expectations of the Fed making another rate hike in March.

According to the CME Group FedWatch Tool, markets are now pricing a 62% probability of a 25 basis points March rate hike. 

With no macroeconomic data releases from the United States in the remainder of the day, the pair's price action is likely to be driven by the DXY. Meanwhile, if the major equity indexes in the U.S., which were able to finish the previous week at record highs, continue to push higher, the improved market sentiment could provide an additional boost to the pair.

Technical levels to consider

The pair could encounter the first technical resistance at 0.9825 (100-DMA) ahead of 0.9915 (Dec. 26 high) and 1.0000 (psychological level). On the downside, supports could be seen at 0.9735 (200-DMA), 0.9700 (psychological level/Jan. 2 low), and 0.9645 (Sep. 25 low).