“¢ A slight deterioration in global risk sentiment underpins CHF’s safe-haven demand.
“¢ A modest USD pull-back from YTD tops exerts some additional downward pressure.
“¢ The profit-taking slide is likely to remain limited ahead of the US monthly jobs report.
The USD/CHF pair came under some selling pressure on Friday and eroded a part of the previous session’s strong upsurge to near four-month tops.
Thursday’s Dovish ECB-led sharp fall in the shared currency provided a strong boost to the US Dollar and assisted the pair to finally make it through the key 1.0100 supply zone. The pair built on this week’s bullish break through the 1.0020 horizontal barrier and rallied to an intraday high level of 1.0124 – the highest since Nov. 13.
However, a global wave of risk-aversion trade, triggered by a sharp decline in Chinese exports data for February, provided a strong boost to traditional safe-haven currencies – including the Swiss Franc and turned out to be one of the key factors prompting some profit-taking on the last trading day of the week.
Adding to this, a modest USD pull-back, further weighed down by a follow-through slide in the US Treasury bond yields, further collaborated to the pair’s weaker tone through the early European session and ahead of today’s key event risk – the release of the closely watched US monthly jobs report (NFP).
The US economy is expected to have added 180K new jobs in February and the unemployment rate is anticipated to have ticked lower to 3.9% from 4.0% previous. Meanwhile, Average hourly earnings, which have gained traction in the recent past, are expected to have risen by 0.3% m/m and by 3.3% y/y.
Any positive surprise would be enough to give a strong lift to the greenback and reignite the pair recent bullish trajectory from closer to the very important 200-day SMA support, touched on Feb. 28.
Technical levels to watch
Any subsequent up-move back beyond the 1.0100 mark is likely to confront some intermediate resistance near Nov. 2018 swing high, around the 1.0130 region, above which the pair is likely to aim towards challenging 1.0170 supply zone. On the flip side, immediate support is now pegged near the 1.0070-65 region, which if broken might prompt some additional long-unwinding trade and accelerate the slide towards 1.0035-30 support en-route the parity mark.