USD/CHF refreshes session low, around mid-0.9800s ahead of FOMC

   •  US PPI jumps to 3.1% y/y, the fastest rate since 2011.
   •  USD fails to benefit from an upsurge in producer prices.
   •  Investors preferred to wait for the key FOMC announcement.

The USD/CHF pair erased early gains to the 0.9900 neighborhood, near two-week tops, and refreshed session lows in the last hour.

Against the backdrop of surging US consumer prices, today's hotter-than-expected US PPI print did little to assist the US Dollar to regain positive traction and was seen as one of the key factors weighing on the major.

The sharp downfall over the past hour or so could also be attributed to some repositioning trade ahead of today's key event risk - the highly anticipated FOMC decision, due later in the day. 

With a 25bps rate hike nearly priced in the market, investors will focus on the updated economic projections for hints about the future monetary policy path. 

Any signal towards faster monetary policy tightening cycle would be seen as positive for the USD and assist the pair to build on this week's recovery move from 1-1/2 month lows. 

Technical levels to watch

The 0.9900 region might continue to act as an immediate resistance, above which a fresh bout of short-covering could lift the pair towards 0.9965-70 support zone with 0.9935 level acting as an intermediate hurdle.

On the flip side, weakness below 0.9830 level (Tuesday's swing low) might turn the pair vulnerable to break below the 0.9800 handle and head towards a descending trend-channel support, currently near the 0.9770 region.