USD/CHF fell below a channel support as concerns of the US Fed expanding its $600 billion bond buyback at a policy announcement later Tuesday. The pair extended its losses to hit its lowest in more than a month early in the day in Europe before recovering partly.
At 7:50 am GMT, the pair was at 0.9666, off an intra-day low of 0.9625, its lowest since November 9. USD/CHF had been holding on to an uptrend since mid-October, which has now broken.
With momentum indicators suggesting some more room on the downside, the pair can retest the record low of 0.9463 (S2) on October 14, but may get some support near 0.9724 (S1) before that.
On the higher side, the pair may find resistance near 0.9932/69 (R1) before rising above 1.0064 (R2).
Data showed on Monday that Swiss producer and import price index fell 0.2 percent in November against market expectation of a 0.1 percent rise. Year-over-year, the index rose only 0.1 percent lower than the street expectations of 0.3 percent.
Before Fed's policy announcement at 7:15 pm GMT, there are key releases like November retail sales and producer price index from the US to set the tone, but the market will likely stay on the sidelines ahead of the big event.