USD/CHF flirting with one-month lows, Fed in focus

The USD/CHF pair built on previous session's downslide and has now dropped back closer to one-month lows touched last week.

The pair remained under some selling pressure for the second consecutive day on Wednesday despite of a modest greenback recovery. In fact, the key US Dollar Index is now placed at session tops, but did little to stalls the pair's ongoing slide back to the 99.00 handle. 

The pair's latest leg of downslide, which lacked any fundamental drivers, could be attributed to long-unwinding pressure following its repeated failure to sustain any recovery move beyond the key 200-day SMA. 

It, however, remains to be seen if the pair confirms a fresh bearish break down or once again manages to bounce back from 1-1/2 week old trading range support amid pre-FOMC repositioning trade. 

Investors' focus on Wednesday would remain glued to the much-awaited Fed decision, which would be looked upon for clues over the central bank's  near-term monetary policy outlook and eventually help determine the pair's next leg of directional move. 

Today's US economic docket also features important macro data - ADP report and ISM non-manufacturing PMI, but are likely to be overshadowed by nervousness ahead of the key event risk.

Technical levels to watch

Break below 0.9890 level is likely to pave way for continuation of the pair's near-term depreciating move towards 0.9855-50 horizontal support ahead of 0.9815-10 support (March 27 low). On the flip side, any recovery attempt back above the 0.9900 handle now seems to confront resistance near 0.9920 level, above which a bout of short-covering could lift the pair back towards 0.9950 region (200-day SMA).