USD/CHF consolidating around 200-DMA after Friday’s strong gains

After an initial drop below 0.9800 handle, the USD/CHF pair has managed to recover all of its lost ground and is currently hovering around the very important 200-day SMA near 0.9805 region.

On Friday, the pair conquered 50-day & 100-day SMAs confluence resistance, and subsequently broke through short-term trading range, following the release of upbeat US CPI print for August. The pair, however, has struggled to build on to its up-move beyond 200-day SMA and seems to consolidate Friday's strong gains. 

This week's key focus would be on the Federal Reserve rate decision on Wednesday, which would be the key determinant of the pair's next leg of directional move. Meanwhile, the Bank of Japan monetary policy decision on Wednesday will also grab market attention and would derive demand for the greenback, eventually providing fresh impetus for the major.

Technical levels to watch

On a sustained move above 200-day SMA, the pair seems to immediately dart towards 0.9835 intermediate barrier before heading towards monthly swing high resistance near 0.9885 level. On the downside, weakness below session low support near 0.9785 seems to be short-lived and is likely to be bought into around 0.9760-50 strong resistance break-point, now turned important support.