USD/CHF digesting recent strong gains beyond parity

The USD/CHF pair was seen consolidating recent gains to 8-month high and has been confined within a narrow band around parity mark.

Currently trading with mild positive bias around 1.0020 region, market seems to be digesting the pair's post-election sharp up-surge of over 450-pips from mid-0.9500s. Meanwhile, the pair's upward trajectory has started showing signs of exhaustion, indicating that the US Dollar rally might have gone ahead of fundamentals. 

However, the recent rally has been supported by expectations of an imminent Fed rate-hike action, with CME group's FedWatch Tool pricing-in over 90% probability of a Fed move in December. Hence, today's US CPI print and Fed Chair Janet Yellen's testimony would be the next big trigger that would help investors determine the next leg of directional move for the major.

Today's US economic docket also features the release of building permits, housing starts and Philly Fed Manufacturing Index and might provide some impetus for short-term traders.

Technical levels to watch

Immediate upside resistance is pegged near 1.0050 level above which the pair is likely to dart towards March swing high resistance near 1.0085-90 region before surpassing 1.0100 handle to test 1.0120-25 resistance. On the downside, 1.00 psychological mark now becomes immediate support, which if broken might trigger a short-term corrective slide initially towards 0.9985-80 region and eventually towards the next important support near 0.9955-50 zone.