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  • Trading action remains subdued ahead of FOMC.
  • US Dollar Index recovers modestly in NA session.
  • Wall Street looks to end day modestly lower.

Following Monday’s decisive upsurge,  the USD/CHF pair is trading in a relatively tight range on Tuesday as investors are moving to the sidelines ahead of tomorrow’s critical FOMC monetary policy announcements. As of writing, the pair was virtually unchanged on the day at 0.9648.

Similar to yesterday’s action, the US Dollar Index recorded modest losses during the first half of the day and recovered in the NA session. Today’s data from the U.S. showed that the Consumer Board’s Consumer Confidence Index improved more than expected in September and the manufacturing sector in the Fifth Fed District continued to gather strength. Although  the US Dollar Index ignored these upbeat data,  another strong performance witnessed in the US T-bond yields help the index retrace its losses and the DXY and was last seen down 0.1% on the day at 94.16.

Previewing the September FOMC meeting, “Wednesday’s Federal Open Market Committee (FOMC) vote to increase the Fed Funds target rate 0.25 percent is as near a certainty as is possible.  The governors and Chairman Powell have been firm in their policy guidance, the economy is growing smartly, jobs are plentiful and wages are rising. With the core PCE index, the Fed’s preferred gauge, at 2 percent in August and a 1.9 percent average over the last six months rate policy is no longer accommodative,” noted FXStreet Senior Analyst Joseph Trevisani.

Technical levels to consider

The immediate support for the pair aligns at 0.9580 (Sep. 24 low) ahead of 0.9535 (Apr. 10 low) and 0.9500 (psychological level). On the upside, resistances could be seen at 0.9675 (Sep. 20 high), 0.9740 (200-DMA) and 0.9815 (50-DMA).