USD/CHF eases below 0.99 as DXY inches closer to 93 mark

Greenback starts the week under pressure.
Investors are awaiting fresh developments on the tax bill.

Eren Sengezer FXStreet

After closing the previous week a few pips above the 0.99 mark, the USD/CHF pair failed to hold above that level on Monday and refreshed its session low at 0.9875. As of writing, the pair was trading at 0.9880, losing 0.25% on the day.

Eyes on tax bill

Although major equity indexes surged to record highs on Friday on expectations that the U.S. tax reform could soon legalize, the greenback struggled to extend its gains and reversed course before breaking above the 94 mark. With investors staying hesitant to commit to long USD positions, the US Dollar Index started to retrace its recent gains. As of writing, the index is trading at 93.18, losing 0.3% on the day.

There won't be any macroeconomic data releases from the United States that could impact the buck's trading action in the remainder of the day and markets will continue to look for fresh headlines that could provide further clues about the tax bill.

In the meantime, in case the US T-bond yields and the Wall Street take advantage of an improved market sentiment in the NA session, the pair could start recovering its losses and we could witness the DXY stage a modest recovery.

Technical levels to consider

The immediate support for the pair could be seen at 0.9860 (20-DMA) ahead of 0.9835 (Dec. 5 low) and 0.9785 (100-DMA). On the upside, resistances align at 0.9930 (Dec. 15 high), 1.0000 (psychological level) and 1.0040 (Oct. 27 high).

USD/CHF consolidating below the 78.6% retracement - Commerzbank

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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