USD/CHF eases off session highs

After failing to break above the 0.97 handle, the USD/CHF pair started to retrace its daily gains and is now trading at 0.9685, still up 0.28% on the day.

The pair's price fluctuation seems to be positively correlated with the US Dollar Index on Tuesday amid a lack of fresh fundamental catalysts. As the DXY inched closer to the 96 handle, the USD/CHF pair's bullish momentum gathered strength, however, with the index easing back to the opening levels, the pair lost traction as well. As of writing, the index is at 95.80, virtually unchanged on the day.

Later in the session, Lael Brainard, a member of the Board of Governors of the Federal Reserve, will be giving his remarks. However, the pair could continue to show indecisive movements ahead of Fed Chair Janet Yellen's semi-annual testimony, which will be the highlight this week for investors looking for clues on further interest rate hikes or a precise timing for the start of the balance sheet reduction. Yellen will be testifying on Wednesday and Thursday.

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In the meantime, major equity indexes in the U.S. signal to a flat opening on Tuesday, suggesting that the market sentiment is not clear.  

Technical outlook

Karen Jones, Head of FICC Technical Analysis at Commerzbank, notes that the pair continues to rebound from key support at .9557/44 (the 200 week ma and 2016 low) and further adds that the correction higher is now indicated to terminate circa .9760/.9825. According to the analyst, in order to negate the downside pressure and restore the up move, the market will need to close above the .9814 end of March low.