USD/CHF weaker below 0.9800 handle

Having failed to build on to Friday's sharp pull-back beyond 200-day SMA, the USD/CHF pair drifted lower at the start of a fresh trading week and dropped further below 0.9800 handle. 

A softer tone surrounding the greenback, as measured by the overall US Dollar index, has been the key factor driving the major lower as investors seemed skeptic of an eventual Fed rate-hike action in September after Friday's release of lackluster US monthly jobs report for August. 

However, markets remained confident that the central bank would still go ahead and raise interest rates at least once before the end of 2016, which might restrict any sharp downslide for the pair. 

With a holiday in the US, in observance of Labor Day, Monday's economic docket has would provide little impetus for the pair ahead of the release of Swiss GDP and CPI numbers on Tuesday.

Technical levels to watch

From current levels, 50-day SMA near 0.9765 region, which is closely followed by 100-day SMA near 0.9750 region, seems to act as immediate support levels. Failure to hold these immediate support levels is likely to drag the pair below Friday's swing low and turn it vulnerable to head towards testing 0.9700 round figure mark.

On the flip side, recovery momentum above 0.9800 handle might continue to face strong resistance at 200-day SMA near 0.9820-25 region above which a fresh leg of buying interest should assist the pair back towards last week's swing high resistance near 0.9885 before making an attempt to reclaim 0.9900 handle.