USD/CHF tests 0.9700 handle amid broadly weaker USD

The USD/CHF pair extended its downslide for the third consecutive session and has now dropped to a fresh 5-day low level of 0.9700.

After repeated failed attempts to conquer 200-day SMA and build on to its momentum above 0.9800 handle, the pair finally broke below an important confluence support near 0.9755-50 region after the Fed decided to leave interest-rates unchanged at its September meeting. The greenback, which was already trading weak prior to the announcement, came under intense selling pressure as markets now seems to have scaled back their expectations for an eventual Fed rate-hike move at least until December. 

In absence of any major market moving economic releases, traders will focus on the release of weekly jobless claims and existing home sales data from the US for short-term trading opportunities.

Technical levels to watch

On a sustained weakness below 0.9700 handle the pair is likely to head back towards testing monthly lows support near 0.9650 area with 0.9670 (Sept. 7 low) acting as intermediate support.

On the flip side, any recovery attempt now seems to confront resistance near 0.9730-35 region, which is followed by confluence support break now turned strong resistance near 0.9755-60 zone.