USD/CHF struggles for direction, flat-lined below 200-DMA ahead of NFP
|- USD/CHF was seen consolidating its recent decline to the lowest level since late February.
- The risk-on mood undermined the safe-haven CHF and extended some support to the pair.
- The prevalent USD selling bias capped the upside ahead of the closely-watched US jobs data.
The USD/CHF pair seesawed between tepid gains/minor losses through the first half of the European session and was last seen hovering around the 0.9070-75 region, nearly unchanged for the day.
A combination of diverging forces failed to provide any meaningful impetus and led to a subdued/range-bound price action near the lowest level since February 26 touched earlier this Friday. The underlying bullish sentiment in the financial markets undermine the safe-haven Swiss franc and was seen as a key factor that extended some support to the USD/CHF pair.
Despite the supporting factor, the USD/CHF pair, so far, has struggled to register any meaningful recovery amid the prevalent US dollar selling bias. Expectations that the Fed will keep interest rates low for a longer period continued acting as a headwind for the USD. Even a goodish pickup in the US Treasury bond yields did little to impress the USD bulls.
Investors also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of Friday's release of the closely-watched US monthly jobs data. The popularly know NFP report is scheduled to be released later during the early North American session and is expected to show an addition of nearly one million jobs in April.
The unemployment rate is also expected to dip to 5.8% from 6.0% in March, though might not be enough to shift the Fed rate expectations. This, in turn, suggests that the path of least resistance for the remains to the downside, which supports prospects for an extension of the USD/CHF pair's recent slide from the 0.9475 region, or multi-month tops set in April.
Even from a technical perspective, acceptance below the very important 200-day SMA and the overnight break below a one-week-old trading range support adds credence to the negative outlook. Hence, a subsequent fall towards challenging the key 0.9000 psychological mark, en-route 0.8980-75 support zone, now looks a distinct possibility.
Technical levels to watch
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