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  • USD/CHF struggles to find direction on Monday.
  • A quiet economic calendar paves the way for technical trading.
  • US Dollar Index stays flat on the day below 94.50.

Following Friday’s sharp 80 pip drop, the USD/CHF pair seems to have steadied near the 0.99 mark on Monday. Although the pair eased to 0.99 to refresh its lowest level in two weeks, the subdued trading action didn’t allow the bearish momentum to gather strength. As of writing, the pair is trading at 0.9917, down 0.08% on the day.

The pair’s movement today seems to be driven by the greenback. The US Dollar Index, which came under a heavy pressure in the second half of the week amid comments from President Trump regarding the FOMC’s monetary policy decision, is moving sideways in the 94.40/50 area in the last hours, confirming the near-term neutral outlook.

The only data from the United States showed that the National Activity Index released by the Federal Reserve Bank of Chicago improved to 0.43 in June after recording a disappointing -0.43 in May. The publication revealed that production-related indicators played a major role in that rebound. Furthermore, the nonfarm payrolls increased by 213K in June. Despite the optimistic figures in that report, the DXY was last seen virtually flat on the day at 94.45.

The next catalyst for the pair could be Wall Street’s performance. It looks like major equity indexes are set to open flat. However, if participants shake off the negative market sentiment from last Friday, we could witness a higher appetite for risk in the session and see the USD/CHF try to recover some of its losses from last week.

Technical levels to consider

The initial support for the pair aligns at 0.9900 (daily low/psychological level) ahead of 0.9855 (Jul. 9 low) and 0.9820 (Jun. 14 low). On the upside, resistances are located at 0.9920 (50-DMA), 1.0000 (psychological level/parity), and 1.0065 (Jul. 13 high).