FX.co ★ Technical analysis of USD/CHF for August 23, 2016

USD/CHF is expected to trade with a bullish bias above 0.9590. The pair is consolidating after it failed to break above the resistance at 0.9650. Nevertheless, the pair stands firmly above its horizontal support at 0.9590 which should limit the downside attempts. In addition, the relative strength index is above its neutrality area at 50 and lacks downward momentum. The U.S. dollar was largely stable as Federal Reserve Vice Chairman Stanley Fischer had earlier commented that the Fed was close to achieving its employment and inflation targets. However, traders should be holding their bets on currencies as they are anticipating Fed Chair Janet Yellen's Friday speech at the monetary-policy symposium in Jackson Hole, Wyoming.

U.S. government bonds rebounded as investors rushed to buy on Friday's price dip. The benchmark 10-year U.S. Treasury yield dropped to 1.541% from 1.580% earlier.

As long as 0.9590 holds as support, look for a technical rebound toward 0.9650. A break above this level would open the way to further upside toward the next resistance at 0.9680.

On the forex front, the U.S. dollar's downfall accelerated as the outlook for further interest rate increases remains uncertain.

Until 0.9595 is not surpassed, the pair is likely to drop toward 0.9530 and even 0.9500 in extension.

Resistance levels: 0.9650, 0.9680, 0.9705

Support levels: 0.9565, 0.9535, 0.9500