USD/CHF holds steady near mid-0.9200s, moves little post-SNB

• USD/CHF witnessed a subdued/range-bound price action through the early European session.
• The market reacted little after the SNB announced its monetary policy decision on Thursday.
• The risk-on mood, the Fed’s more hawkish tilt supports prospects for some near-term upside.

The USD/CHF pair held steady near mid-0.9200s through the early European session and moved little after the Swiss National Bank (SNB) announced its policy decision.

The pair struggled to capitalize on the previous day's post-FOMC bounce from the 0.9215 region and seesawed between tepid gains/minor losses through the first half of the trading action on Thursday. The US dollar retreated a bit from one-month tops touched in reaction to the Fed's more hawkish tilt and acted as a headwind for the USD/CHF pair.

However, the prevalent risk-on mood continued undermining demand for the safe-haven Swiss franc and helped limit the downside for the USD/CHF pair. Traders seemed rather unimpressed by the fact that the SNB board members decided to leave the monetary policy settings unchanged at the September quarter monetary policy assessment this Thursday.

Meanwhile, the Fed indicated that moderation in the pace of asset purchases may soon be warranted if economic progress continues broadly as expected. Moreover, Fed Chair Jerome Powell added that the pandemic-era asset purchases could stop completely by mid-2022. Adding to this, the dot plot revealed a growing inclination to raise interest rates in 2022.

This should help revive the USD demand and supports prospects for some near-term appreciating move for the USD/CHF pair. Hence, any meaningful dip might still be seen as a buying opportunity and remain limited. Traders now look forward to the US economic docket, featuring the release of Weekly Jobless Claims and flash PMI print, for a fresh impetus.

Technical levels to watch