USD/CHF retreats to 0.9670 area despite broad-based USD strength

Upbeat employment report boosts USD on Friday.
Trade worries weigh on the market sentiment.
USD/CHF remains on track to close the third straight week with losses.

Eren Sengezer FXStreet

After touching its lowest level in more than four months at 0.9640, the USD/CHF pair staged a sharp recovery in the early NA session and advanced to a new daily high at 0.9685. However, the pair failed to preserve its bullish momentum and retraced a portion of its gains. At the moment, the pair is still up 0.15% on the day at 0.9666.

A strengthening greenback following the upbeat NFP report seemed to be the primary catalyst behind the pair upsurge today. According to the U.S. Bureau of Labor Statistics, the total nonfarm employment rose by 201,000 in August to surpass the market consensus of 191K. Moreover, the wage inflation grew 0.4% on a monthly basis in August to lift the annual rate up to 2.9% from 2.7%. With the initial reaction to the data, the US Dollar Index rose to 95.35 before pulling back a little. At the moment, the index is up 0.25% on the day at 95.27.

However, a lack of progress on the trade talks between China and the U.S. continue to weigh on the market sentiment, which makes it easy for the safe-haven CHF to stay resilient against other currencies. In an interview with CNBC, White House economic adviser Larry Kudlow said that the United States' demands of China have not been satisfied and added that China could find itself more isolated if the negotiations failed.

Technical levels to consider

The pair could face the first resistance at 0.9730 (200-DMA) ahead of 0.9800 (psychological level/20-DMA) and 0.9890 (50-DMA). On the downside, supports are located at 0.9640 (daily low), 0.9580 (Apr. 16 low) and 0.9500 (psychological level).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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