• USD/CHF gains some positive traction on Thursday amid a modest pickup in the USD demand.
• Rebounding US bond yields underpins the buck amid some repositioning ahead of the US data.
• Bets for smaller rate hikes by the Fed keep a lid on the USD and act as a headwind for the pair.

The USD/CHF pair attracts some buying in the vicinity of the weekly low, around the 0.9160 region on Thursday and recovers a part of the previous day's modest losses. The pair sticks to its modest gains heading into the North American session and is currently placed just below the 0.9200 mark.

In the meantime, an intraday pickup in the US Treasury bond yields assists the US Dollar to recover a bit from an eight-month low, which, in turn, lends some support to the USD/CHF pair. The USD uptick could further be attributed to some repositioning trade ahead of important US macro releases - the Preliminary (first estimate) fourth-quarter GDP print, Durable Goods Orders and New Home Sales data.

That said, rising bets for a smaller 25 bps interest rate hike by the Federal Reserve in February keep a lid on any meaningful upside for the US bond yields. This might hold back the USD bulls from placing aggressive bets. Furthermore, concerns about a deeper global economic downturn underpin the Swiss Franc's (CHF) relative safe-haven status and also contribute to capping gains for the USD/CHF pair.

Nevertheless, spot prices remain well within the striking distance of the lowest level since November 2021 touched last week. Moreover, the lack of any buying interest suggests that the near-term bearish trend witnessed since early November 2022 might still be far from being over. This makes it prudent to wait for strong follow-through buying before confirming that the USD/CHF pair has formed a bottom.

Technical levels to watch