USD/CHF extends recovery with eyes on US NFP, Powell’s speech

• USD/CHF buyers await fresh catalysts to extend the previous run-up.
• Trade positive news joined mixed Swiss GDP to propel the quote upwards.
• Key data, speech from the US central bank leader will be in the spotlight.

Even in the absence of fresh trade clues, USD/CHF takes the bids to 0.9865 as the US Dollar (USD) remains firm ahead of the key releases on Friday.

Not only renewed US-China trade optimism but mixed growth figures of the second quarter (Q2) Swiss gross domestic product (GDP), contrast to upbeat ADP Employment Change from the US, also helped the pair to bounce off 21-day simple moving average on Thursday.

Contrasts to better than forecast 0.2% QoQ figure of 0.3%, Switzerland’s Q2 GDP lagged well below 0.9% market expectations on a yearly basis while flashing 0.2% growth. On the other hand, the US ADP Employment Change, an early signal for today’s key Nonfarm Payrolls (NFP) crossed 149K expectations with 195K mark.

Given the recent lack of fresh trade/political headlines, investors are well inclined to carry the previous trend ahead of the key August month employment data from the US and speech from the US central bank chief.

Risk tone remains firm with the US 10-year Treasury yields extending prior run-up to 1.575% while S&P500 Futures also flashing gains.

Forecasts suggest the US Nonfarm Payroll could weaken to 158K from 164K prior whereas Average Hourly Earnings might step back from 3.2% to 3.1% on YoY while likely being unchanged to 0.3% on MoM. Further, the Unemployment Rate is expected to remain unchanged at 3.7%.

The US Federal Reserve Chairman is scheduled to speak at an event hosted by the Swiss Institute of International Studies, in Zurich. The title of his speech says “Economic Outlook and Monetary Policy”, which in turn will push traders to closely observe the comments ahead of the blackout period for the Fed policymakers.

Technical Analysis

Pair’s sustained trading beyond the 21-DMA level of 0.9807 enables it to rise further towards 100-DMA level of 0.9933.