USD/CHF attempting to build momentum beyond 0.9900 handle

The USD/CHF pair extended the recovery momentum and is now attempting to build on to its momentum back above 0.9900 handle.

Currently trading around the highest level since late July, around 0.9905-10 band, the pair reversed a knee-jerk downward slide to 0.9885, touched immediately after the release of US CPI print for September, as market participants seem convinced that the Fed would eventually move towards raising interest rates by the end of this year with the CME group's FedWatch Tool still indicating 60.0% probability of such an action in December. 

Moreover, upbeat sentiment around equity markets is also driving flows away from the perceived safe-haven Swiss Franc towards the greenback and extended further support to the pair's recovery momentum.

It is, however, worth noticing that the pair has repeatedly failed to sustain its move above 0.9900 handle and hence, runs the risk of a fresh rejection at higher levels.

Technical levels to watch

On a sustained move above 0.9910 immediate resistance, a fresh bout of short-covering is likely to lift the pair immediately towards July monthly high strong resistance near 0.9950 region. Alternatively, reversal from current resistance, and a subsequent drop below 0.9885 immediate support, might negate bullish scenario and turn the pair vulnerable to head back towards testing session lows support near 0.9860 en-route its next major support near 0.9815-10 region.

 

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