USD/CHF drops to 4-week low, eyeing 50-DMA to extend support

After an initial tepid bounce to 0.9776, the USD/CHF pair extended its Friday's sharp fall and has now dropped to a fresh 4-week low level to currently trade below the mid-point of 0.9800-0.9700 handle. 

In the aftermath of a highly disappointing NFP print and weaker-than-expected ISM non-manufacturing PMI, the pair on Friday recorded a sharp fall of over 1.5% and settled at nearly 3-week low level, around 0.9750 level. 

After Friday's dismal US economic data, the prospects of a Fed rate-hike any time soon, June/July, looks highly unlikely and is thus providing additional support to USD bears.

Although there is nothing in-terms of economic releases from the US on Monday, but the Fed Chair Janet Yellen is scheduled to deliver a speech later during NY session and is likely to provide some trading opportunity for short-term traders.

From technical perspective, the pair's sharp reversal on Friday, leading to a break below an important moving averages confluence support near 0.9840 region has turned the pair vulnerable to continue drifting lower in the near-term.

Technical levels to watch

From current levels, bulls would look to defend 50-day SMA support near 0.9720, which if broken decisively seems to continue dragging the pair further below 0.9700 handle towards testing its next support near 0.9660 area.

Meanwhile on the upside, 0.9800 round figure mark now seems to have emerged as immediate resistance. Any further up-move beyond this immediate round figure mark resistance might now be capped at a moving averages confluence support break-point, now turned strong resistance, near 0.9835-45 region.