USD/CHF tests 200-DMA barrier near 0.9835 region, highest since mid-May

Haresh Menghani FXStreet

The USD/CHF pair surged through the 0.9800 handle and tested the very important 200-day SMA, for the first time since mid-May, in the post-NFP action.

The pair jumped to near five-month tops after the latest monthly US jobs report showed unemployment rate fell to a new 16-year-low and wage gains accelerated. Meanwhile, the market largely ignored the headline NFP print, showing a loss of 33K jobs in September and attributed the weakness to Hurricanes - Harvey and Irma.

• US: Total nonfarm payroll employment decreased by 33,000 in September

The beat on wages raised December Fed rate hike odds to over 90% and sparked a rally in the US Treasury bond yields, eventually providing an additional boost to the already stronger US Dollar and helped the pair to break through the 0.9800 handle.

It would now be interesting to see if bulls remain in control and help the pair to confirm a fresh bullish break through 200-day SMA barrier, currently near the 0.9835 region.

Investors now look forward to comments by influential FOMC members - New York Fed President William Dudley and Dallas Fed President Robert Kaplan, for some fresh impetus.

Technical levels to watch

A strong follow through buying interest beyond the 0.9835 region has the potential to continue lifting the pair towards reclaiming the 0.9900 handle, with some intermediate resistance near the 0.9865 level.

On the downside, the 0.9800 handle now becomes immediate support to defend, which if broken might trigger a corrective slide and drag the pair back towards 0.9750-45 horizontal support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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