USD/CHF drops to fresh session lows, below mid-0.9800s

   •  A sudden USD fall prompts some aggressive selling over the past hour or so.
   •  Fading safe-haven demand does little to lend any support and stall the downfall. 
   •  Downside seems limited ahead of today’s US CPI print and the Fed on Wednesday. 

The USD/CHF pair faded a bullish spike and quickly retreated around 40-pips from an intraday high level of 0.9884 touched in the last hour.

For the third consecutive session, the pair failed to sustain/build on its momentum beyond the 50-day SMA and has now slipped below mid-0.9800s, or fresh daily lows. A sudden decline in the US Dollar was seen as one of the key factors behind the pair's latest leg of sharp fall over the past hour or so. 

Even the prevalent risk-on mood, supported by positive headlines coming out of the closely watched Trump-Kim meeting and which tends to weigh on the Swiss Franc's safe-haven appeal, also did little to lend any support. 

Meanwhile, a mildly positive tone around the US Treasury bond yields ahead of today's important release of the US consumer inflation figures and the highly anticipated FOMC decision on Wednesday, which might now help limit further downside, at least for the time being.

Technical levels to watch

A follow-through selling pressure has the potential to continue dragging the pair further towards the 0.9800 handle en-route a short-term descending trend-channel support, currently near the 0.9770 region.

On the flip side, up-move beyond the 0.9885 immediate hurdle is likely to confront strong hurdle near the 0.9900-0.9910 region, above which a bout of short-covering could lift the pair further towards 0.9965-70 supply zone.