USD/CHF hangs near one-week lows, around 0.9125-30 region

• USD/CHF was seen oscillating in a range near one-week lows touched earlier this Tuesday.
• The risk-on impulse undermined the safe-haven CHF and extended some support to the pair.
• Easing tapering fears continued weighing on the USD and capped the upside for the major.

The USD/CHF pair seesawed between tepid gains/minor losses through the first half of the European session and was last seen trading in the neutral territory, around the 0.9125-30 area.

A combination of diverging forces failed to provide any meaningful impetus to the USD/CHF pair, instead led to a subdued/range-bound price action near one-week lows touched earlier this Tuesday. The risk-on impulse undermined the safe-haven Swiss franc and extended some support. That said, the prevalent US dollar selling bias acted as a headwind for the major.

The global risk sentiment got a lift after the US Food and Drug Administration (FDA) granted full approval to the Pfizer/BioNTech COVID-19 vaccine. This, to a larger extent, offset worries about the economic fallout from the fast-spreading Delta variant of the coronavirus and was evident from a generally positive tone around the global equity markiets.

Meanwhile, the continuous surge in new COVID-19 cases might have pushed back expectations for the likely timing of the Fed's tapering plan. Investors now seem convinced that the Fed will wait for a longer period before rolling back its pandemic-era stimulus. This was seen as a key factor that contributed to the USD's ongoing pullback from multi-month lows.

However, a goodish pickup in the US Treasury bond yields helped limit any deeper losses for the greenback. Apart from this, investors also seemed reluctant to place any aggressive bets ahead of Fed Chair Jerome Powell's speech at the Jackson Hole Symposium. This, in turn, warrants some caution before positioning for any further depreciating move for the USD/CHF pair.

Market participants now look forward to the US economic docket, featuring the second-tier releases of New Home Sales and Richmond Manufacturing Index. The data might do little to provide any meaningful impetus, though the broader market risk sentiment might still produce some short-term trading opportunities around the USD/CHF pair.

Technical levels to watch