USD/CHF rejected again near 200-DMA, drops to 0.9770

The USD/CHF pair once again failed to build on to its move above 0.9800 handle and conquer 200-day SMA. The pair turned sharply lower and has now moved within striking distance of retesting an important confluence support near 0.9760-55 region. 

The pair's inability to extend gains posted at the end of last week and repeated failed attempts to clear 200-day SMA clearly indicates traders' reluctance to carry USD bullish bets ahead of the key event risk, Fed monetary policy decision. 

Uncertainty over the timing of next Fed rate-hike action has been the key factor capping fresh buying interest around the greenback and hence, contributes to increasing the importance of today's Federal Reserve monetary policy decision. 

The accompanying policy statement and updated economic projections would be key determinants of the greenback's near-term trajectory. And the subsequent press conference by the Fed Chair Janet Yellen is likely to infuse a fresh bout of volatility around the major. 

Technical levels to watch

Bulls would try and defend 0.9760-55 confluence support, which if broken seems to accelerate the slide immediately towards 0.9715 horizontal support before the pair breaks through 0.9700 handle and head towards testing its next major support near 0.9675 level.

On the upside, 200-day SMA near 0.9800 region remains immediate strong resistance. A follow through buying interest might now trigger a short-covering rally immediately towards 0.9835 intermediate resistance ahead of September monthly high resistance near 0.9885 level.