USD/CHF slips into negative territory, US data and Fed in focus

The USD/CHF pair reversed tepid recovery gains to session high level of 0.9917 and has now slipped into negative territory for the fourth consecutive session.

Currently trading around 0.9890-85 region, testing session lows, a fresh wave of US Dollar selling pressure seems to have emerged in the past hour or so, and has been the exclusive driver of the pair’s retracement from session peak. The pair, however, has held above 100-day SMA support near 0.9860-65 region, 2-1/2 month lows struck in the previous trading session, in anticipation of some hawkish tone from the Federal Reserve's monetary policy statement later during the day.

Meanwhile, the prevalent risk-on mood, as depicted by buoyant sentiment surrounding global equity markets, has failed to boost the Swiss Franc’s safe-haven demand and has collaborated towards limiting immediate downslide for the major, at least for the time being.

Ahead of the Fed announcement, traders will look forward to the US economic docket - ADP report on private sector employment and ISM manufacturing PMI, in order to grab some short-term trading opportunities. 

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com notes, "unless we are back above the 9930 level the pressure still remains to the downside...but looking a bit shorter term do we have the legs to actually break below this 9855 area....I think possibly not at this point...We have really seen a sell off in this market...and although this can happen usually we see a bit of backing and filling first...So although extreme high risk...I think to be  a buyer in the 9860 area could actually give reward if the market flicks back...I would not be looking for a lot on the topside.  .but I would be looking for the 10020 to 10040 resistance area.....Usually the 61.8 Fib doesn't break easily and we can place sops quite tight on here below the 10th Nov low at 9820...."