USD/CHF pares early gains, still positive ahead of Powell

• Disappointing headline NFP exerted some downward pressure on the USD.
• Bearish traders further took cues from a sharp pullback in the US bond yields.
• The downside remains limited amid risk-on mood and ahead of Powell’s speech.

The USD/CHF pair quickly retreated around 35-40 pips in a knee-jerk reaction to softer US headline NFP print, albeit has still managed to hold with modest daily gains around the 0.9880 region.
 
The pair met with some selling during the early North-American session after the latest US monthly jobs report came in to show that the economy added 130K new jobs in August vs. 158K expected and the July’s downwardly revised reading of 157K.

USD weighed down by softer US jobs report

The data overshadowed upbeat wage growth figures and triggered a sharp intraday reversal in the US Treasury bond yields, which eventually exerted some fresh downward pressure on the US Dollar and was seen weighing on the major.
 
The downside, however, remained cushioned, at least for the time being, amid the prevailing risk-on mood, supported by the latest optimism over US-China trade talks and which tends to undermine the Swiss Franc’s perceived safe-haven demand.
 
Hence, it will be prudent to wait for a strong follow-through selling before positioning for any further near-term depreciating move as the focus now shifts to the Fed Chair Jerome Powell’s scheduled speech later during the US trading session.

Technical levels to watch