USD/CHF breaks below parity ahead of US data

• US Dollar Index fails to hold around mid-94s on Monday.
• Europen indices stay in the red to reflect a weak appetite for risk.
• Retail sales and NY Empire State Manufacturing Index from the U.S. are next in line.

Although the USD/CHF pair was able to close the week a little above the critical parity mark, it failed to stay there on Monday amid a higher demand for safe-havens and a broad-based selling pressure surrounding the greenback. As of writing, the pair was trading at 0.9980, losing around 40 pips, 0.4%, on the day.

Despite the fact that Asian equity indices recorded sharp gains following the upbeat macroeconomic data releases from China, European indices couldn’t find inspiration ahead of Trump-Putin summit. At the moment, Germany’s DAX index was down 0.15% while the UK’s FTSE 100 was losing around 1%.

In the meantime, after failing to break above the 95 mark last week, the US Dollar Index started the week near mid-94s and spent a few hours moving sideways there before coming under a bearish pressure. Nonetheless, the USD’s slide today seems to be a technical correction as there were no fundamental catalysts that are seemingly triggering a greenback sell-off.  

Investors are now shifting their focus to retail sales and NY Fed Manufacturing Index reading from the United States. The greenback valuation and the risk perception are likely to drive the pair’s price action for the remainder of the day.

Technical levels to consider

The pair could face the first support at 0.9950 (Jul. 12 low) ahead of 0.9910 (50-DMA) and 0.9860 (Jul. 9 low). On the upside, resistances are located at 1.0000 (psychological level/parity), 1.0065 (Jul. 13 high) and 1.0100 (psychological level).