USD/CHF consolidates below parity as markets ignore PCE data from US

• Personal spending/income, PCE price index data from the U.S. came in line with expectations.
• DXY fluctuates in a tight range above mid-94s, remains in the red.
• The subdued trading action is likely to continue in the NA session.

After spiking up above the critical parity level and refreshing its best level in more than five months at 1.0040 on Friday, the USD/CHF pair went into a consolidation phase and moved in a 20-pip range on Monday. As of writing, the pair was trading at 0.9985, gaining 0.06% on the day.

No impact from today's data on rate hike expectations

According to the data released by the Bureau of Economic Analysis, the PCE price index in the U.S. increased 0.4% on a monthly basis in September while the core version, the Fed's favorite gauge of inflation, rose by 0.1%, keeping the annual change steady at 1.3%. Following the data, the CME Group FedWatch Tool's December rate hike probability stayed virtually unchanged around 97%.

• US: Personal income increased $66.9 billion (0.4%) in September

With no more significant data left in the remainder of the session, the pair is poised to move sideways. Ahead of the important meetings of the Fed, the BoJ, and the BoE, investors could choose to remain on the sidelines. In the meantime, major equity indexes in the U.S. had a mixed start to the day with the Dow Jones Industrial Average adding 0.15% and the S&P 500 losing 0.2%, not providing any clear clues about the market sentiment.

Technical levels to consider

The RSI indicator on the daily graph for the pair is sitting above the 70 mark, suggesting that the pair could make a technical correction before extending its upside. Above the critical 1.000 (psychological level/parity), the pair could face the initial resistance at 1.0040 (Oct. 27 high) ahead of 1.0080 (May 12 high). On the downside, supports are located at 0.9875 (Oct. 26 low), 0.9765 (200-DMA) and 0.9670 (100-DMA).