USD/CHF digesting last week’s strong gains, neutral at 0.9775

Following last week's sharp up-surge to nearly erase its losses posted in the prior two weeks, the USD/CHF pair is seen consolidating below 0.9800 handle to currently trade around 0.9775 level. 

On Friday, the pair initially dropped after Janet Yellen's speech but rose sharply on broad based US Dollar strength after hawkish comments from Fed Vice Chairman Stanley Fischer that fueled speculations of an eventual Fed rate-hike action by the end of this year. The major subsequently moved back above an important confluence resistance near 0.9740-50 region, comprising of 50-day and 100-day SMAs. 

Focus now shifts to today's release of Fed's preferred inflation gauge, Core PCE Price Index, and personal income / spending data, which could provide an additional boost for the greenback ahead of the next major fundamental trigger, NFP data, later during the week.

Technical levels to watch

From current levels, previous resistance near 0.9750-40 zone now seems to act as immediate support, below which the pair seems to drift back towards 0.9700 round figure mark. Any further weakness below 0.9700 handle might now be short-lived and is likely to be bought into around 0.9675-70 horizontal support.

Meanwhile on the upside, a fresh buying interest is likely to emerge above 0.9800 round figure mark resistance that should assist the pair immediately towards testing the very important 200-day SMA support near 0.9830 region. A follow through buying interest would pave way for continuation of the pair's near-term bullish momentum and aim to reclaim 0.9900 handle before heading towards retesting July monthly high resistance near 0.9945-50 region.