USD/CHF turns flat below 0.97 on weak Chicago PMI data

The USD/CHF pair came under a modest selling pressure in the NA session and erased its daily gains. After setting its session high at 0.9713, the pair is now trading at 0.9685, where it closed the previous week.

Despite that recent retreat, the pair is fluctuating in a relatively narrow 50-pip range on Monday and is having a difficult time finding its next short-term direction amid a lack of significant catalysts. The only noteworthy data from the U.S. showed that the Chicago PMI fell to its lowest level in three months at 58.9 in July from 65.7 in June. After the data, the US Dollar Index gave back its daily gains and is now flat at 93.20. Other data from the U.S. revealed that the Pending Home Sales increased by 1.5% on a monthly basis in June and remained unchanged at 0.7% on a yearly basis.

• US Dollar upside stalled near 93.40

On the other hand, after starting the day higher, major equity indexes in the U.S. failed to gather momentum, allowing the safe-haven CHF to find demand, as investors look to cash in their profits on the last day of the month. At the moment, the Dow Jones Industrial Average is up 0.25% while the S&P 500 is losing 0.15%.

There are no more data left in the remainder of the day, and the pair is likely to trade calmly in its recent range. On Tuesday, investors will follow the Core Personal Consumption Expenditures Price Index, The Fed's favorite inflation gauge, carefully to see if the inflation in the U.S. is showing any signs of a pickup.

Technical outlook

Short-term indicators for the pair remain neutral on Monday. A daily close above 0.9700 (psychological level/Jul. 14 high) could open the door to 0.9740 (Jun. 26 high) and 0.9775 (100-DMA). On the downside, supports could be seen at 0.9635 (Jul. 28 low), 0.9590 (Jul. 17 low) and 0.9490 (Jul. 26 low).

• USD/CHF downside pressure above 0.9700 – Commerzbank