USD/CHF confined in a narrow trading band below 0.9700 handle

After an initial dip to session low of 0.9677, the USD/CHF pair has been oscillating within a narrow trading band. The pair has managed to bounce-off few pips from session low but still remained in negative territory, below 0.9700 handle. 

A minor greenback recovery, as measured by the overall US Dollar Index, could have led to a tepid short-covering bounce ahead of FOMC Esther George's testimony on monetary policy and trade before the Financial Services sub-committee. Market participants will closely scrutinize her comment in order to gauge possibilities and timing of the next Fed rate-hike action, which might eventually assist the pair to reverse some of Tuesday's steep losses.

On the economic data front, the pair had a muted reaction to the release of Foreign Currency Reserves from Switzerland that showed a rise to 627 billion in August as compared to 615 billion reported in July. 

The US economic calendar on Wednesday also features the release of JOLTS job openings and Fed's Beige Book that would be looked upon by traders in order to capture immediate momentum play.

Technical levels to watch

A follow through selling pressure below session low support near 0.9677-75 region seems to accelerate the slide immediately to 0.9640-35 support, which if broken is likely to drag the pair towards testing sub-0.9600 support. On the flip side, sustained recovery above 0.9700 handle, leading to a subsequent momentum above session high resistance near 0.9709, is likely to boost the pair towards 100-day SMA resistance near 0.9750.