USD/CHF struggles to find direction, stays in tight range above 0.96

• USD/CHF fluctuates in a 40-pip range on Monday.
• Focus remains on US government shutdown.
• Greenback is having a tough time finding demand.

After starting the week with a small bearish gap, the USD/CHF pair failed to make a decisive recovery above the 0.96 mark with greenback struggling to gain traction amid the government shutdown in the U.S. As of writing, the pair was down 0.2% on the day at 0.9607.

The US Dollar Index, which was able to retrace a portion of its daily drop in the last couple of hours, came under a renewed pressure following the latest headlines from the U.S. Talking to reporters following the bipartisan budget meeting; Democratic Senator Manchin said that lawmakers were still in 'stalemate,' as pre Reuters reports. At the moment, the DXY is down 0.25% on the day at 90.25. On the other hand, the data released by the Federal Reserve Bank of Chicago showed that the National Activity Index improved to 0.27 in December from 0.11 in November, falling short of the market expectation of 0.44.

Meanwhile, major equity indexes started the day on a weak note on Monday with the investors' sentiment staying negative. The Dow Jones Industrial Average and the S&P 500 were down 0.22% and 0.2% respectively at the start of the session. In case Wall Street remains on the back foot in the remainder of the session, the CHF could continue to gather strength as a safe-haven.

Technical levels to consider

The RSI indicator on the daily chart remains below the 50 mark, suggesting that sellers are still in control of the price action. With a decisive break below 0.9590 (daily low), the pair could continue to edge lower toward 0.9535 (Jan. 19 low) and 0.9500 (psychological level). On the upside, resistances align at 0.9640 (Jan. 19 high), 0.9700 (20-DMA) and 0.9735 (200-DMA).