USD/CHF rebounds sharply, surges past 1.0100 handle after ECB

Having dropped to a fresh weekly low near 1.0040 region, the USD/CHF pair reversed sharply and soared through 1.0100 handle to 3-day peak.

Currently trading around 1.0160 region, few pips off session peak level of 1.0168, the pair caught fresh bids at lower level amid resurgent greenback buying interest in wake of ECB-led disappointment. Today's ECB decision surprised market participants, who had expected the central bank to extend its current €80 billion bond purchase program by 6-month. Instead, the central bank extended it only until April 2017 and tapered the purchases to €60 billion till the end of 2017. The shared currency came under intense selling pressure, which resulted into a sharp surge in the greenback.

Meanwhile, in-line with estimates US weekly jobless claims added on to the prevalent bullish sentiment surrounding the US Dollar and trigger a sharp short-covering rally for the USD/CHF major.

Looking forward, investors would remain focused on next week's FOMC meeting, where the Fed is widely expected to raise interest rates. Markets, however, would closely scrutinize the accompanying rate-statement (dot plots) in order to evaluate possibilities and timing of next Fed rate-hike action in 2017 and hence, would remain a key determinant of the pair's next leg of directional move.

Technical levels to watch

Immediate upside resistance is pegged near 1.0175-80 region above which the pair seems to immediately head towards 1.0200 round figure mark. A convincing move above 1.0200 handle would now trigger a fresh bout of short-covering and continue boosting the pair further towards yearly high resistance near 1.0255-60 region.

On the downside, 1.0100 handle now becomes immediate support, which if broken would now turn the pair vulnerable to break through weekly lows support near 1.0040 area and head towards testing its next major support near parity mark.