USD/CHF stays in narrow band near mid-0.98s

• US Dollar Index extends decline toward 96 on Monday.
• Trading action is likely to remain subdued ahead of the New Year holiday.

After slumping to its lowest level since late September at 0.9790 last Friday, the pair staged a modest recovery and finished the week at 0.9840. With thin trading conditions not allowing for decisive movements in the last day of the year, the pair is moving sideways in a very tight range and was last seen virtually unchanged on the day at 0.9842.

The only data release from the United States later in the day will be the December Dallas Fed Manufacturing Index, which is unlikely to receive a meaningful reaction from the market participants. Ahead of this data, the US Dollar Index is down 0.2% on the day at 96.20.

Although Wall Street will be open for a full day of trading today, the risk perception should stay mixed amid year-end flows and not provide a directional clue to the pair. When markets return to full capacity on Wednesday, the IHS Markit’s December (final) Manufacturing PMI reports will be looked upon for fresh impetus.

Technical levels to consider