USD/CHF surrenders early strong gains to over 4-month tops

The USD/CHF pair surrendered all of its early gains to over 4-month tops and has now drifted into negative territory. 

Earlier today, the pair built on overnight strong gains and touched an intraday high level of 0.9786, the highest since late May, amid persistent greenback buying interest. 

The key US Dollar Index was seen retreating from 1-1/2 month highs and seems to be only factor prompting traders to take some profits off the table, just ahead of the next key hurdle near the 0.9800 handle.

Meanwhile, the prevalent risk-on environment, as depicted by strong trading sentiment around European equity markets, did little to lend any support to the Swiss Franc's safe-haven appeal. 

Adding to this, growing prospects for additional Fed rate hike move and optimism over the US tax reform plan might now contribute towards limiting any deeper losses, at least for the time being. 

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Today's US economic docket lacks any major market moving economic releases and hence, traders would take cues from the Fed Governor Jerome Powell's comments. 

Technical levels to watch

Immediate support is pegged near 0.9720 level and is closely followed by the 0.9700 handle, which if broken could extend the corrective slide back towards 0.9680-75 support. 

On the upside, 0.9765 level is likely to act as immediate resistance, above which the pair is likely to make a fresh attempt towards reclaiming the 0.9800 handle before eventually darting towards the very important 200-day SMA resistance near the 0.9840-45 region.