USD/CHF digesting Wednesday’s strong gains, hovering around 100-DMA

The USD/CHF pair is seen consolidating Wednesday's strong gains and is currently hovering around 100-day SMA immediate resistance near 0.9725-30 region.

The pair on Wednesday rebounded sharply and moved back above 0.9700 handle, erasing all of its weekly losses. Better-than-expected ADP report on US private sector employment, which is considered as a precursor to Friday's official jobs report, triggered a bout of short-covering rally and lifted the pair back towards 100-day SMA. 

Focus now shifts the much anticipated BOE monetary policy decision, which has the potential to trigger a bout of volatility in the FX market and eventually drive the greenback. However, major event risk for the pair's near-term trajectory would be Friday's monthly jobs report from the US, popularly know as NFP.

Technical levels to watch

On a sustained move above 100-day SMA, the pair seems to immediately head towards 50-day SMA resistance near 0.9760 above which the upward trajectory could get extended towards the very important 200-day SMA resistance near 0.9860 region.

On the flip side, 0.9730 now seems to protect immediate downside, which if broken should drag the pair back below 0.9700 handle, towards retesting 0.9650 support. A follow through selling pressure below 0.9650 would now negate possibilities of any further up-move and turn the pair vulnerable to further downside in the near-term.