USD/CHF turns negative on day, continues to float above 0.97
The USD/CHF pair came under a modest selling pressure in the last hour and eased towards the lower band of its 2-day old trading channel. At the moment, the pair was at 0.9715, losing 8 pips on the day.
Despite that recent drop, the pair remains stuck in a 50-pip range since the start of the week and struggles to set a near-term direction amid a lack of fresh fundamental catalysts. Business Optimism Index released by the NFIB Research Foundation in the U.S. earlier in the day showed that the index improved to 105.2 in July from 103.6 in June and beat the market expectation of 103.6. However, the greenback didn't show any apparent reaction to the data. As of writing, the DXY was at 93.15, losing 0.17% on the day.
Later in the session, JOLTS Jobs Openings and the IBD/TIPP Economic Optimism data from the U.S. will be looked upon for fresh impetus but they are unlikely to bring volatility to the markets as the low summer-trading volume would prevent sharp fluctuation. In fact, it might take a while before we see some noticeable price action since Wednesday's economic docket won't be offering any significant data either.
In the meantime, the market sentiment could provide some short-term trading opportunities for the market participants. After making its ninth straight record daily close, the Dow Jones Industrial Average is pointing to a lower start on Tuesday. If the major equity indexes in the U.S. follow their European peers in the session and fall, the traditional safe-haven CHF could find gather some strength against the greenback.
Technical outlook
Momentum indicators continue to stay in their neutral zones, failing to provide a technical clue for the next direction. On the upside, resistances align at 0.9765 (Jun. 20 high), 0.9810 (May 30 high) and 0.9850 (Mar 17 high) while supports could be seen at 0.9670 (Aug. 4 low), 0.9600/10 (psychological level/20-DMA) and 0.9490 (Jul. 27 low).
- USD/CHF upside interest reignited above 0.9814 – Commerzbank