USD/CHF drops below 0.9800 on profit-taking

The USD/CHF pair is seen consolidating after three consecutive days of sharp up-move and is currently trading with some minor weakness to currently trade just below 0.9800 handle. 

Easing global risk aversion is driving investors away from the perceived safe-haven assets, helping the USD/CHF pair to extend its recovery from over one-and-half month low touched in the previous week. Adding to it, stronger US GDP print and better-than-expected Consumer Confidence index provide a further boost to the pair, lifting it to a fresh four-week high level on Tuesday. 

Given the pair's sharp up-move of more than 300-pips (over 3% rise) in less than four-days, traders seem inclined to take some profits off the table, awaiting for fresh impetus from today's US economic releases. 

Economic data slated for release from the US on Wednesday includes, the Federal Reserve's favorite inflation measure, Core PCE Price Index, Personal Spending and Pending Home Sales data.

Technical levels to watch

Weakness below 0.9800 level, leading to a break below 0.9785 level, is likely to get extended towards 100-day SMA (resistance turned support) near 0.9755-50 region. Drop below 100-day SMA is likely to get bought into and hence seems to be limited by 50-day SMA support near 0.9735-30 region.

On the flip side, momentum above session peak level of 0.9820 seems to provide the required momentum to boost the pair towards testing its next resistance near 0.9875-80 region before heading further beyond 0.9900 handle towards testing May highs strong resistance around 0.9945-50 area.