• USD/CHF rebounds after touching a one-and-half-week trough earlier this Thursday.
• The SNB decides to maintain the status quo and does little to provide any impetus.
• Traders look to the US Retail Sales for a fresh impetus amid a modest USD recovery.

The USD/CHF pair stages a modest intraday recovery from the vicinity of the monthly low, around the 0.8665 area and extends its steady ascent through the first half of the European session on Thursday. Spot prices hold steady near the 0.8720 region and move little after the Swiss National Bank (SNB) announced its policy decision.

As was widely anticipated, the SNB decided to leave the key policy rate unchanged at 1.75% on the back of a clear downward trend in domestic inflation. In the absence of any major surprises, the announcement does little to influence the Swiss Franc (CHF). That said, a modest US Dollar (USD) bounce acts as a tailwind for the USD/CHF pair The upside potential, however, seems limited in the wake of the Federal Reserve's (Fed) dovish shift on Wednesday.

Furthermore, SNB Chairman Thomas Jordan recently said the central bank would not hesitate to tighten monetary policy further if necessary despite the fact that domestic inflation was within the 0-2% target for a sixth consecutive month in November. This, in turn, favours the CHF bulls and suggests that the path of least resistance for the USD/CHF pair is to the downside. Hence, any further move up might still be seen as an opportunity for bearish traders.

Market participants now look to the US economic docket, featuring the release of monthly Retail Sales figures later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus. Apart from this, the broader risk sentiment, which tends to drive demand for the safe-haven CHF, should contribute to producing short-term trading opportunities around the USD/CHF pair.

Technical levels to watch