USD/CHF weaker below 0.9800 handle ahead of US economic releases

The USD/CHF pair extended its retracement from over one-month high level of 0.9828 touched on Tuesday and dropped to 100-day SMA support before recovering few pips from session low to currently trade around 0.9770 region.

The greenback, as measured by the overall US Dollar Index, has been gaining traction amid reviving hopes of an eventual Fed rate-hike action in 2016, with CME group's FedWatch Tool pointing to 55% probability of such a move in December. 

However, cautious investor sentiment on Wednesday benefitted the safe-haven appeal of the Swiss Franc and capped the pair below 200-day SMA. Meanwhile, further downslide was limited as investors await for a slew of US macro releases, later during NA trading session. 

Wednesday’s release of ADP report on US private sector employment would be looked upon as a precursor to the official monthly jobs report (NFP), due later during the week. Other US economic data slated for release on Wednesday includes ISM non-manufacturing PMI, trade balance data and factory orders. 

Technical levels to watch

On the downside, 100-day SMA near 0.9755 region remains immediate support to defend below which the pair is likely drift towards 50-day SMA support near 0.9730-25 band. A follow through selling pressure below 50-day SMA support might negate prospects of any further up-move and turn the pair vulnerable to break through 0.9700 handle and head towards retesting 0.9660-55 strong horizontal support.

Conversely, sustained momentum above 200-day SMA immediate resistance near 0.9795-0.9800 region, leading to a subsequent break through Tuesday's swing high resistance near 0.9830 area, should help the pair further towards September monthly high resistance near 0.9885 level.