USD/CHF reverses early dip, back near session tops post-SNB

   •  SNB maintains expansionary monetary policy and said that CHF is highly valued.
   •  The central bank also showed the willingness to intervene in the FX markets. 

The USD/CHF pair managed to reverse an early dip to 0.9655 area and recovered around 15-20 pips post-SNB.

The pair extended overnight rejection slide from the 0.9700 handle, four-day highs, and lost some additional ground on Thursday. The prevalent US Dollar selling bias, this time led by retracing US Treasury bond yields, was seen as one of the key factors exerting some downward pressure.

The downtick turned out to be short-lived and found some support after the Swiss National Bank (SNB), in the latest monetary policy statement, reiterated that the Swiss Franc is highly valued. The central bank also showed the willingness to intervene in the FX market, as necessary, and provided a minor lift to the major.

Adding to this, the central bank's decision to maintain its expansionary monetary policy by leaving the benchmark sight deposit rate unchanged at -0.75% remained supportive of the modest uptick witnessed over the past hour or so. 

It, however, remains to be seen if the pair is able to attract any follow-through buying interest or remains capped below the 0.9700 handle as traders now look forward to the second-tier US economic data for some fresh impetus.

Technical levels to watch

Any subsequent up-move might continue to confront some fresh supply near the 0.9700 mark, above which the pair is likely to dart towards retesting 200-day SMA support turned resistance near the 0.9735-40 region.

On the flip side, a meaningful retracement slide now seems to find some support near the 0.9625 region, which if broken might turn the pair vulnerable to slide back towards challenging the 0.9600 handle.