USD/CHF climbs back closer to YTD tops, focus remains on FOMC

   •  Fading safe-haven demand inspires bulls and helps bounce off lows. 
   •  A modest USD weakness offset by positive US bond yields.
   •  ADP report passes unnoticed as investors await FOMC decision.

The USD/CHF pair managed to recovery majority of its early lost retracement slide and has now inched back closer to YTD tops. 

The pair rebounded around 25-pips from session lows and was being supported by the prevailing risk-on mood, which tends to weigh on the Swiss Franc's safe-haven appeal. This coupled with a follow-through uptick in the US Treasury bond yields provided an additional support to pair's modest rebound. 

The uptick, however, lacked any strong conviction amid a mildly softer tone around the US Dollar, which failed to gain any fresh traction despite slightly better-than-expected the US ADP report on private sector employment. 

Moreover, traders also seemed reluctant to place any fresh aggressive bets and preferred to wait on the sidelines ahead of the highly anticipated FOMC decision, which might provide clues over the central bank's future tightening path and eventually help determine the next leg of directional move.

Technical levels to watch

A sustained move above 0.9970-80 area should easily lift the pair towards reclaiming the parity mark, above which momentum could further get extended towards Oct. 2017 swing highs resistance near the 1.0035-40 region.

On the flip side, 0.9930 level might continue to protect the immediate downside, which if broken might prompt some long-unwinding trade and drag the pair further towards testing sub-0.9900 level.