USD/CHF climbs back closer to daily tops, up little around 0.9175 area

The USD/CHF pair managed to recover around 25 pips from daily lows and moved to the top end of its daily trading, around the 0.9175 region during the early North American session.

The pair attracted some dip-buying near mid-0.9100s and for now seems to have stalled this week's retracement slide from four-week tops, around the 0.9235 region touched on Wednesday. A solid rebound in the global equity markets undermined the safe-haven Swiss franc and extended some support to the USD/CHF pair.

The risk-on impulse triggered a strong rally in the US Treasury bond yields, which along with expectations for an imminent Fed taper announcement, helped limit the downside for the US dollar. This was seen as another factor that assisted the USD/CHF pair to gain positive traction and recover a part of the overnight losses.

Investors seem convinced that the Fed will begin rolling back its massive pandemic-era stimulus sooner rather than later. The market speculations were further fueled by hawkish comments from several Fed officials this week. Apart from this, Friday's release of hotter-than-expected US Producer Price Index favours USD bulls.

According to the data published by the US Bureau of Labor Statistics, the headline US PPI rose to 8.3% on a yearly basis in August from 7.8% in the previous month. This marked the largest advance since the 12-month data was first calculated in November 2010. On a monthly basis, the PPI decelerated to 0.7% from 1% in July.

The fundamental backdrop supports prospects for additional gains and a possible move back toward reclaiming the 0.9200 mark. Some follow-through buying might continue to confront stiff resistance near the 0.9235-40 region, which if cleared decisively will set the stage for an extension of the appreciating move.

Technical levels to watch