USD/CHF retraces from multi-week highs ahead of US data

Having posted a session peak at 0.9885, the highest level since July 27, the USD/CHF pair retraced back below 0.9850 to currently trade with only marginal gains around 0.9845 region. 

A minor greenback pull-back, as measured by the overall US Dollar Index, is contributing to some profit taking move after the pair's relentless of over 250-pips from a two-month low level of 0.9537 touched on August 18. 

Next in focus would be ISM manufacturing PMI and weekly jobless claims data from the US ahead of Friday's crucial NFP release, which would help investors to gauge possibilities of an eventual Fed rate-hike action during its next monetary policy meet on September 20-21.

From technical perspective, the pair is retracing from near-term over-bought conditions (RSI > 70) on 4-hourly chart. However, with the pair holding above the very important 200-day SMA and daily RSI reading still reading below 70, the pull-back could be expected to be short-lived.

Technical levels to watch

From current levels, 200-day SMA near session low at 0.9830 region remains immediate support to defend. Failure to hold this immediate support is likely to accelerate the slide towards Wednesday's low support near 0.9717 before the pair eventually drops to 0.9705-0.9700 strong support. 

On the flip side, renewed buying interest above 0.9875 level now seems to pave way for continuation of the pair's near-term upward trajectory and help it to reclaim 0.9900 handle and head towards testing July daily closing high resistance near 0.9925 area.