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  • US Dollar Index stays in the red near 94 ahead of employment numbers.
  • Trade tensions  continue to weigh on market sentiment.

The USD/CHF pair is trading in a 30-pip range on Friday as investors are waiting for the nonfarm payrolls report from the United States and developments surrounding the trade tension between China and the U.S. As of writing, the pair was trading at 0.9927, down 0.06% on the day.

As announced back in June, the United States’ tariffs on Chinese imports went into effect at 04:00 GMT on Friday. Li Keqiang, the current Premier of the State Council of China argued that a trade war would never solve anything and added they would do everything in their power to avoid one. “If any party resorts to increase of tariffs, China would take measures in response to protect China development interests and safeguard multilateral trade regime and rules.” Keqiang further added.

How the stock markets in the U.S. start the day will provide a clear view of the overall market sentiment. If we see Wall Street slip in the early trading hours of the NA session, the CHF could find demand as a safe-haven.

On the other hand, the monthly nonfarm payrolls report from the U.S. will be the next significant catalyst for the USD. “Market players are expecting the US economy to have added 195K new jobs in June, the unemployment rate is seen at record lows of 3.8%, while as usual, wages are barely expected to show signs of life, up monthly basis 0.3% and by 2.8% YoY,” writes Valeria Bednarik, FXStreet’s Chief Analyst.

“Anyway, the report could have a limited influence on currency pairs, particularly if readings are in-line with market’s forecast, with the focus shifting then to risk-sentiment correlated to the trade war.”

Technical levels to consider

The pair could encounter the first technical resistance at 0.9945 (Jul. 5 high) ahead of 1.0000 (psychological level/parity), and 1.0055 (May 9 low). On the downside, supports align at  0.9920 (50-DMA), 0.9855 (Jun. 25 low), and 0.9790 (Jun. 7 high).