USD/CHF sits near one-month tops, below mid-0.9200s ahead of US CPI

• USD/CHF continued scaling higher for the sixth consecutive session on Wednesday.
• Rising bets for an early Fed taper underpinned the USD and remained supportive.
• Investors now look forward to the US consumer inflation figures for a fresh impetus.

The USD/CHF pair maintained its bid tone heading into the North American session and was last seen trading around the 0.9235 region, or one-month tops.

The pair prolonged its recent strong rebound from the vicinity of the key 0.9000 psychological mark and gained some follow-through traction for the sixth consecutive session on Wednesday. The ongoing strong momentum was sponsored by sustained US dollar buying, bolstered by expectations that the Fed will begin scaling back its pandemic-era stimulus sooner rather than later.

Friday's impressive US monthly jobs report (NFP) marked a step forward towards the Fed's goal of substantial further progress in the labour market recovery. This, in turn, forced investors to bring forward the likely timing for policy tightening. The Fed officials have also started to guide the market towards early tapering and higher interest rates as soon as 2022.

The repricing of the Fed's next policy move, along with the passage of a $1 trillion US infrastructure bill pushed the US Treasury bond yields to the highest level since July 14. In fact, the yield on the benchmark 10-year US government bond touched an intraday high of 1.376%, which, in turn, was seen as another factor that continued acting as a tailwind for the greenback.

Meanwhile, the combination of supporting factors, to a larger extent, helped offset worries that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery. This, along with stable performance in the equity markets, failed to lend any support to the safe-haven Swiss franc or hinder the USD/CHF pair's ongoing positive momentum.

Moving ahead, the key focus will remain on the release of the latest US consumer inflation figures, due in a short while from now. The data will play a key role in driving market expectations about the Fed's next policy move, which will influence the near-term USD price dynamics and provide a fresh directional impetus to the USD/CHF pair.

Technical levels to watch