USD/CHF hoovers around 0.9300 on broad US dollar strength
- Risk-off market sentiment triggers a flight to safe-haven flows, boosts the greenback against the Swiss franc.
- Central banks across the globe, undecided between attacking inflation or stimulate growth
- US ADP Employment Change crushed the analyst's expectations, increasing the Fed’s QE reduction prospects.
The USD/CHF is edging higher for the second consecutive day, is trading at 0.9277, barely up 0.04% during the New York session at the time of writing.
Dampened market sentiment prevails as witnessed by a sell-off in the equity markets. High energy prices and rising bond yields are the main drivers of the day. Central banks across the globe scramble to attack inflation, thus hurting economic growth, or keep the stimulus on the back of the hypothesis that rising prices are temporary, as commented by Fed's Chair Jerome Powell.
The US 10-year Treasury yield is barely down one basis point sitting at 1.51%. The US Dollar Index, which tracks the greenback's performance against its peers, is up 0.41%, sits at 93.34, underpinning the USD/CHF price action.
The first US jobs report supports the Fed's bond tapering prospects
On the macroeconomic front, the US ADP Employment Change, which measures private company's hiring, revealed that hiring increased to 568K in September, more than the 428K expected by investors. Further, the report added that labor shortages should fade as health conditions tied to the COVID-19 variant improve.
The ADP report added to the prevailing optimism by the Federal Reserve Chairman Jerome Powell, which said that one good employment report would convince him about the bond tapering process.
On Thursday, the US economic docket will feature the Initial Jobless Claims for the week ending on October 1, which would provide additional clues about the labor market in anticipation of the Nonfarm Payrolls report, to be released on Friday.
USD/CHF Price Forecast: Technical outlook
The USD/CHF is trading well above the daily moving averages (DMA's), supporting the upside bias, but in the last hour or so, the pair has been pressured by solid resistance at 0.9307, which capped the move.
For buyers to resume the uptrend, they need a daily close above 0.9307. In case of that outcome, the following resistance levels would be 0.9332 and 0.9367
On the other hand, failure at 0.9300 could motivate sellers to exert downward pressure on the pair. The first support would be 0.9230, followed by 0.9215.
The Relative Strength Index (RSI) is at 55, flattish, suggesting that the USD/CHF pair might consolidate before resuming the upside move.
KEY ADDITIONAL LEVELS TO WATCH
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
