USD/CHF consolidates in a range below 0.9300 mark, bullish bias remains

• USD/CHF was seen consolidating its recent gains to one-and-half-week tops.
• Sustained USD buying continues to act as a tailwind amid the risk-on impulse.
• The bias favours bullish traders and supports prospects for additional gains.

The USD/CHF pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the first half of the European session. The pair was last seen trading around the 0.9290 area, just a few pips below one-and-half-week tops touched earlier this Wednesday.

The pair, so far, has struggled to build on its gains recorded over the past three trading sessions, though the near-term bias remains tilted firmly in favour of bearish traders. Following a brief consolidation during the first half of the trading action on Wednesday, the US dollar regained positive traction and shot to the highest level since early November 2020. This, in turn, should continue to act as a tailwind for the USD/CHF pair and help limit the downside.

The USD continued drawing some support from expectations for an early policy tightening by the Fed. It is worth recalling that the Fed last week hinted that it could begin rolling back its massive pandemic-era stimulus as soon as November. Moreover, the dot-plot indicated policymakers' inclination to raise rates in 2022. Apart from this, a solid rebound in the equity markets should undermine the safe-haven Swiss franc and assist the USD/CHF pair to regain positive traction.

Hence, the range-bound price move might still be categorized as a consolidation phase and warrants some caution before confirming that the USD/CHF pair has topped out in the near term. Any meaningful dip might still be seen as a buying opportunity near the 0.9260-50 region, which should now act as a key pivotal point for short-term traders. The stage seems all set for a move back towards challenging YTD lows, around the 0.9330-35 region touched at the beginning of last week.

Market participants now look forward to the release of Pending Home Sales data from the US. The focus, however, will be on Fed Chair Jerome Powell's comments at the ECB Forum on Central Banking. This, along with the US bond yields, might influence the USD price dynamics. Apart from this, the broader market risk sentiment might also provide some impetus to the USD/CHF pair.

Technical levels to watch