USD/CHF spikes to fresh weekly tops, 0.96 back on sight ahead of FOMC

The USD/CHF pair continued gaining traction through the mid-European trading session and surged to fresh multi-day highs beyond mid-0.9500s.

Heading into the key event risk, traders seemed to lighten bearish USD bets and hence, a goodish greenback recovery, with the key US Dollar Index reclaiming the 94.00 handle, has been one of the key factors driving the pair higher for the third consecutive session on Wednesday. 

This coupled with the prevalent risk-on mood, as depicted by strong gains in the European equity markets, was also seen denting the Swiss Franc's safe-haven appeal and collaborated to the pair's strong up-move to fresh weekly tops. 

Meanwhile, possibilities of some stops being triggered, on a sustained move above 0.9530 hurdle might have further contributed to the pair's sharp uptick over the past couple of hours. 

It would now be interesting to see if the pair is able to build on the up-move and aim towards reclaiming the 0.9600 handle ahead of the FOMC decision, due to be announced later during the NY trading session.

Technical levels to watch

Currently placed at session tops, around 0.9570-75 region, immediate resistance is pegged near the 0.9600 handle, above which a fresh bout of short-covering might continue boosting the pair towards mid-0.9600s intermediate resistance ahead of 0.9675-80 important horizontal barrier.

On the flip side, 0.9560-50 zone now becomes immediate support to defend, which if broken could accelerate the slide back 0.9520 horizontal support en-route the key 0.9500 psychological mark.