USD/CHF extends sideways grind below 0.8900

• USD/CHF is struggling to find direction on Thursday.
• US Dollar Index stays in the negative territory near 90.20.
• Markets await official confirmation of EU-UK trade deal.

The USD/CHF pair is having a difficult time making a decisive move in either direction on Thursday amid light holiday trading. As of writing, the pair was up 0.1% on a daily basis at 0.8888.

USD remains on the back foot

With the latest headlines surrounding the UK-EU trade talks pointing out to an imminent deal, the greenback came under pressure on Wednesday. After losing nearly 0.3%, the US Dollar Index (DXY) continued to push lower as the GBP/USD pair extended its rally beyond 1.3600 during the European morning. At the moment, the DXY is moving sideways near 90.20, losing 0.18% on the day.

Investors now await official confirmation of the Brexit deal ahead of the Christmas holiday. The fact that GBP/USD is already up nearly 2% in the last two days suggests that a deal is already priced in and the market reaction could remain short-lived.

There won't be any macroeconomic data releases from the US on Thursday. Stock and bond markets will close early.

Technical levels to watch for