USD/CHF technical analysis: Set-up seems tilted in favour of bullish traders ahead of FOMC

• Over the past few trading sessions, the USD/CHF pair has been drifting lower along a short-term descending trend-channel formation on the 1-hourly chart.
• Given last week’s goodish up-move from the vicinity of the 0.9800 handle, the channel constituted towards the formation of a bullish continuation – flag pattern.

The top end of the descending trend-channel coincides with 50-hour SMA and should act as a key pivotal point as market participants keenly await the outcome of the highly anticipated FOMC July monetary policy meeting.

Meanwhile, technical indicators on hourly charts have again started gaining positive momentum and maintained their bullish bias on the daily chart, supporting prospects for an eventual breakthrough the mentioned confluence barrier.

Sustained move beyond the 0.9910-20 region will reinforce the constructive outlook and set the stage for a move back towards the 0.9945-50 supply zone before the momentum further extends towards reclaiming the key parity mark.

Alternatively, failure at the current resistance is likely to find some support near the lower end of the trend-channel, currently near the 0.9880 region, which if broken might negate the bullish outlook and open the room for further decline.

Below the said support, the pair is likely to break through the 0.9850 intermediate horizontal support and head back towards challenging the 0.9800 round figure mark, which seems to be the scenario in case of a more dovish shift by the Fed.

USD/CHF 1-hourly chart