USD/CHF is expected to trade with bearish bias as the Key resistance is at 0.9935. The pair is capped by its descending 50-period moving average, which plays resistance role and maintains the downside bias. The relative strength index is below its neutrality level at 50 and lacks upward momentum. In addition, the previous high at 0.9935 is playing a key resistance role, which should limit the upside potential.
As expected, the U.S. Federal Reserve kept interest rates unchanged. The Institute for Supply Management (ISM) reported that its national factory activity index increased to 56.0 in January, the highest level since November 2014, from 54.5 in December. Automatic Data Processing (ADP) data showed that employers added 246,000 private jobs in January (vs. +168,000 expected, +151,000 in December). The U.S. dollar surrendered gains made earlier in the session after the Federal Reserve shed little light on its plans to raise interest rates this year.
As long as this key level holds on the upside, look for a further drop to 0.9860 and even 0.9830 in extension.
Resistance levels: 0.9955, 0.9980, and 1.0010
Support levels: 0.9860, 0.9830, and 0.9815
The material has been provided by InstaForex Company - www.instaforex.com