USD/CHF stays calm below 0.99 ahead of NFP data

• USD/CHF continues to correct Wednesday’s rally.
• US Dollar Index stays in negative territory.
• Markets await December NFP report.

Following Wednesday’s 70 pip rally, the USD/CHF staged a technical correction on Thursday and gave back 20 pips. With investors waiting patiently for the December employment data from the United States, the pair stays relatively calm and was last seen trading at 0.9868, losing 10 pips on the day.

Although the decisive gains witnessed in the major European equity indexes point to an improved market sentiment today, the modest selling pressure surrounding the greenback doesn’t allow the pair to gain traction. At the moment, the DXY is down 0.12% on the day at 96.15.

Previewing today’s NFP data, “A good US employment report will allay some of the contaigion fears for the US economy and offer the dollar support in the shape of a more aggressive Fed.  But the key for the dollar, the US economy and US equities is a trade agreement with China,” said FXStreet senior analyst Joseph Trvisani. “With a trade deal all three will gain as will the mainland economy and the rest of the world can enjoy the ride. But if by mid-year there is still no deal the impact on US and Chinese growth could lead the world to recession.”

Technical levels to consider