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  • USD/CHF is trading in a narrow band on Monday.
  • US Dollar Index starts the new week in a calm manner.
  • US markets will be closed due to the Memorial Day holiday.

The USD/CHF pair gained traction on Friday and reached its highest level in more than a week at 0.9032 before ending the week near 0.9000. In the absence of significant fundamental drivers and high-tier macroeconomic data releases, the pair stays quiet on Monday and was last seen posting small daily gains at 0.9003.

The US markets will be closed due to the Memorial Day holiday on Monday and the pair is likely to extend its sideways grind.  On Tuesday, the ISM Manufacturing PMI from the US will be looked upon for fresh impetus. Reflecting the thin trading conditions, the US Dollar Index is having a difficult time making a decisive move in either direction.

Later in the week, the ISM Services PMI, ADP Employment Change and Nonfarm Payrolls data will be featured in the US economic docket.

USD/CHF technical outlook

Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, argues that USD/CHF could target 0.9100 with 0.8931/10 area providing strong support.

“USD/CHF held the 0.8931/10 band of support (Fibo), as we suspected and the market looks set to extend its correction to 0.9100 and potentially the 55-day ma at 0.9168, which we are expecting to cap the rally,” Jones explained. “The 0.8910 level is regarded as the last defence for the 0.8872 mid-February low and the 0.8780 January low.”

Additional levels to watch for