USD/CHF struggles to find direction, stays flat above 0.9950
- US Dollar Index fails to hold above 96.
- CHF fails to take advantage of the risk-off mood.
- Coming up: Richmond Fed Manufacturing Index.
The USD/CHF pair is fluctuating in a tight 30-pip range on Tuesday and is having a difficult time setting its next short-term direction. As of writing, the pair was virtually unchanged on the day at 0.9955.
Despite the heavy selling pressure witnessed in global equity indexes, investors don't show much interest in the safe-haven CHF. At the moment, Germany's DAX and the UK's FTSE indexes are down 2.15% and 1.1%, respectively, which could force Wall Street to start the day on the back foot. If we see another sharp drop in major equity indexes in the U.S., the CHF could continue to stay resilient against the buck even if it fails to record gains.
On the other hand, ahead of FOMC members Kashkari and Bostic's speeches and the Richmond Fed Manufacturing Index, which is expected to drop to 25 in October from 29 in September, the US Dollar Index stays relatively quiet near the 96 mark to reflect the short-term neutral outlook surrounding the dollar.
Technical levels to consider
The RSI indicator on the daily chart continues to move sideways around the 70 handle, suggesting that the bullish momentum is struggling to gather strength. On the downside, the initial support could be seen at 0.9940 8daily low) ahead of 0.9900 (psychological level) and 0.9860 (100-DMA). Resistances could be seen at 0.9970 (daily high), 1.000 (parity level), and 1.0065 (Jul. 13 high).