USD/CHF muted below 0.9800 after US housing data

The USD/CHF pair failed to build on to its recovery from session low and maintained its bearish bias below 0.9800 handle following the release of disappointing US housing data.

According to the data release just a while ago, US housing starts fell more-than-expected by 5.8% during the month of August to 1.142 million annualize pace, while building permits witnessed an unexpected drop to 1.139 million units. 

The data did little to help the greenback in building on to its recovery and the pair remained in negative territory for the second consecutive day. 

Market focus, however, would remain on BOJ and the Federal Reserve monetary policy decisions on Wednesday, which is likely to trigger a fresh bout of volatility in the FX market and determine the near-term trajectory for the greenback, eventually driving the USD/CHF major in the near-term.
 
Technical outlook

A team at Dukascopy Bank SA notes, "An attempt at a symmetrical triangle formation failed early September when the rate reinforced the recently broken upper trend-line, causing the rate to take on a bullish channel. The bottom trend-line remained relatively stable, increasing its significance with repeated tests to the downside. Bullish potential reflected in a descending wedge formed on the 30 minute chart, meaning that the uptrend could not be limited with the channel, and there is a chance of an upward breakout. The pair faces 0.9825, the upper trend-line of the channel, and a close above would trigger a rally towards 0.9848, with a retracement right after. If the pair fails at the channel line once again, 0.9783 will serve as an intermediate support level on the pair's way down with further risks at 0.9769/70."