USD/CHF inches back closer to overnight swing highs, 0.9200 remains in sight

• USD/CHF gained positive traction for the third successive session on Friday.
• The risk-on mood undermined the safe-haven CHF and remained supportive.
• The focus remains on Fed Chair Powell’s speech at Jackson Hole Symposium.

The USD/CHF pair rallied nearly 30 pips from the early European session lows and shot to fresh daily tops, around the 0.9185 region in the last hour.

The pair attracted some dip-buying near the 0.9185 region and moved into the positive territory for the third consecutive session on Friday. Bulls might now be looking to build on this week's goodish rebound from the vicinity of the 0.9100 mark amid the underlying bullish sentiment, which tends to undermine demand for the safe-haven Swiss franc.

Concerns about the economic fallout from the Delta variant of the coronavirus eased after the US Food and Drug Administration (FDA) granted full approval to the Pfizer/BioNTech vaccine. This raised hopes that inoculations in the US could accelerate and boosted investors' confidence, which was evident from a generally positive tone around the equity markets.

Meanwhile, the risk-on flow, along with speculations that the Fed might still begin rolling back its pandemic-era stimulus in 2020 acted as a tailwind for the US Treasury bond yields. This, in turn, extended some support to the US dollar and was seen as another factor that pushed the USD/CHF pair, though the uptick lacked strong bullish conviction.

Investors now seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the Fed Chair Jerome Powell's speech at the Jackson Hole Symposium later this Friday. Market participants will look for clues about the likely timing of the Fed's tapering, which should provide a fresh directional impetus to the USD/CHF pair.

Heading into the key event risk, traders might take cues from the release of the Fed's prefered inflation gauge – Core PCE Price Index. This, along with the US bond yields, might influence the USD price dynamics. Apart from this, the broader market risk sentiment might further produce some short-term trading opportunities around the USD/CHF pair.

Technical levels to watch