USDCHF tumbles below parity on USD worst day in weeks
- US Dollar extends losses during the American session.
- NFP surpasses expectations but does not help Dollar.
- USDCHF erases most weekly gains, back under parity.
The USDCHF is falling almost two hundred pips on Friday, on the worst performance in weeks, amid a broad-based Dollar slide. The better-than-expected US jobs numbers did not help the Dollar, which is ending the week pointing to further weakness.
The pair recently hit a fresh two-day low at 0.9940 and it remains with a bearish bias. The next support stands at around 0.9920. The reversal from the 1.0150 area, which again capped the upside, is firm.
Dollar down despite NFP
The US official employment report showed numbers above expectations, although the slowest monthly gain in jobs since December 2020. The labor market remains healthy.
The US Dollar initially rose following the NFP but then reversed sharply, resuming the decline. “The currency market looks to be more concerned about speculation of a relaxation of China's zero COVID policy than a firmer jobs report or higher Fed terminal rate, which may be more influential in triggering some positioning adjustments. The easy phase of the USD's bid is behind us, but the onus will be on regional prospects to undermine the USD. Near-term, we think there may be more noise-than-signal in the FX space,” commented analysts at TD Securities.
The US Dollar is still marginally higher for the week but is far from the highs, on a busy week that included a 75 basis points rate hike from the Federal Reserve. Next week, on Tuesday, are US mid-term elections and on Thursday CPI data is due. Inflation numbers will be the highlight of the week and will likely impact markets.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
