USD/CHF trades with modest gains, above mid-0.9200s ahead of US data/FOMC minutes

• Fading safe-haven demand weighed on the CHF and assisted USD/CHF to regain positive traction.
• Modest USD weakness held back bulls from placing aggressive bets and capped any further gains.
• Investors look forward to the US Retail Sales data for some impetus ahead of the FOMC minutes.

The USD/CHF pair traded with a mild positive bias heading into the North American session and was last seen hovering just a few pips below the daily high, around the 0.9250-0.9255 region.

The USD/CHF pair attracted fresh buying on Wednesday and inched back closer to the overnight swing high amid receding Russian-Ukraine tensions, which undermined the Swiss franc's safe-haven status. In fact, Russia announced on Tuesday that some of its troops positioned near the Ukraine border were returning to bases after the completion of exercises. This helped ease market concerns about a further escalation of the conflict between Russia and the West, which, in turn, boosted investors' confidence.

On the other hand, a softer tone around the US Treasury bond yields kept the US dollar on the defensive and failed to impress bullish traders or provide any additional boost to the USD/CHF pair. That said, growing acceptance that the Fed would tighten its monetary policy at a faster pace than anticipated might continue to act as a tailwind for the buck. This, in turn, supports prospects for the emergence of some USD dip-buying and a further near-term appreciating move for the USD/CHF pair.

Traders, however, might refrain from placing aggressive bets and prefer to wait for a fresh catalyst from the FOMC meeting minutes, due for release later during the US session. In the meantime, the US monthly Retail Sales figures, along with the US bond yields will play a key role in influencing the USD price dynamics. Apart from this, the broader market risk sentiment might provide some impetus to the USD/CHF pair and allow traders to grab some short-term opportunities.

Technical levels to watch