USD/CHF attempting a move beyond 0.9800 level to confirm further recovery

As the US Dollar gains traction ahead of the CPI release, the USD/CHF pair continues to inch higher in an attempt to scale through day's peak of 0.9790 and test 0.9800 handle.

The pair on Monday broke through 0.9750 immediate resistance and extended the momentum on Tuesday to currently trade near the high point of the day, just ahead of the US CPI print for the month of April. Along with the CPI data, building permits and housing starts figure would assist investor to evaluate the health of the US housing sector.

The pair has registered a remarkable recovery of almost 450-pips from a multi-month low of 0.9444 level, tested earlier during May. Moreover, it is also trading above short-term moving averages (10, 20 and 50-day SMAs), clearly suggesting extension of the recovery trend in the near-term.

Technical levels to watch

On a clear break through 0.9800 handle, the pair seems all set to extend its appreciating move immediately toward 100 and 200-day SMAs confluence region near 0.9830-40 zone. A convincing strength above this resistance confluence would confirm a medium term bottom formation near 0.9443 and could assist the pair to continue scaling higher levels in the near-term.

On the flip side, failure to conquer 0.9800 handle and a subsequent weakness back below 0.9755-50 resistance turned support area, might continue to find support near 20 & 50-day SMAs confluence region near 0.9700 round figure mark. Only a decisive break back below this support confluence would negate near-term bullish bias.