USD/CHF up little, around mid-0.9700s; political uncertainty capping gains

The USD/CHF pair built on Friday's rebound from the 0.9700 neighborhood and traded with a mild positive bias at the start of a new trading week.

The pair, however, seemed lacking any strong follow through traction and has now retreated around 15-pips from session tops to currently trade around mid-0.9700s. A modest uptick in the US Treasury bond yields helped the US Dollar to recover its post-CPI losses and has been one of the key factors behind the pair's up-move on Monday.

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However, the latest political landscape in the Euro-zone, with Angela Merkel's CDU losing in a vote in the northern state of Lower Saxony on Sunday and uncertainty over Catalonian independence, was seen lending support to the Swiss Franc's safe-haven appeal and kept a lid on the pair's up-move.

Looking at the broader picture, the pair has been oscillating within a narrow trading band over the past four trading sessions. Hence, it would be prudent to wait for a decisive break through the near-term range before positioning for the next leg of directional move.

Later during the NA session, the release of Empire State Manufacturing Index would be looked upon to grab some short-term trading opportunities.

Technical levels to watch

Immediate resistance remains near the 0.9770 region, above which the pair is likely to surpassing the 0.9800 handle and aim towards retesting the very important 200-day SMA hurdle near the 0.9820-25 region.

On the flip side, 0.9715-10 area might continue to protect immediate downside, which if broken decisively is likely to accelerate the slide towards 100-day SMA support near the 0.9655-50 region.