USD/CHF building on to strength above 0.9900 mark

The USD/CHF pair maintained its strong bid tone and is building on to its gains above 0.9900 handle to currently trade at a two-month high, around 0.9935-40 band.

After consolidating around 200-day SMA for four trading session, the pair on Tuesday initially broke on the downside just to recover swiftly and surge through 0.9900 handle, confirming a near-term bullish break-out above the very important moving average. 

The pair's bullish momentum gained further traction after a couple of upbeat US economic data, released on Tuesday, further fueled speculations of an imminent Fed rate-hike later during this year.

The pair on Wednesday continued with its bullish momentum and has now moved within striking distance of May highs as investors await for the FOMC monetary policy decision later during NY trading session. Market participants would be focusing on the accompanying monetary policy statement in order to determine the timing for next Fed rate-hike move, which would be key determinant for the US Dollar's move in the near-term.

Trade July 27 Federal Reserve interest rate decision - Live Coverage

Technical levels to watch

On the immediate upside, 0.9945-50 region (May highs) is likely to act as immediate resistance, above which the pair seems all set to reclaim parity mark and continue with its near-term up-surge towards its next major resistance near 1.0020-30 region (late Feb. highs).

Meanwhile on the downside, 0.9900 round figure mark now seems to protect immediate downside, which if broken seems to drag the pair back towards 200-day SMA support near 0.9855-50 region. A follow through selling pressure might continue to drive the pair lower but any further downfall below 200-day SMA now seems to be limited by a strong horizontal support near 0.9820 level.