- The post-FOMC USD selling bias remained unabated on Friday.
- Renewed US-China trade jitters exerted some additional pressure.
- The focus now shifts to Friday’s release of the key US jobs report.
The USD/CHF pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow trading band near two-week lows set earlier this Friday.
Having failed to find acceptance above the very important 200-day SMA earlier this week, the pair witnessed a dramatic turnaround in reaction to broad-based US Dollar weakness. Despite the Fed’s hawkish tone, indicating that further monetary easing is unlikely, the Greenback remained depressed in the wake of some fresh US-China trade jitters.
Weighed down by weaker USD/trade uncertainty
In the latest trade-related developments, a Bloomberg report on Thursday suggested that Chinese officials have doubts about reaching a comprehensive long-term deal with the US. Renewed trade uncertainty pushed global stock markets lower, which further benefitted the Swiss Franc’s safe-haven status and contributed to the pair’s ongoing downfall.
However, some signs of stability in equity markets helped stall the recent freefall in the US Treasury bond yields, which provided some respite to the USD bulls and extended some support to the major. Moreover, investors also seemed reluctant to place aggressive bets ahead of Friday’s release of the US monthly jobs report further collaborated towards limiting the downside.
The headline NFP is expected to show that the US economy added 89K new jobs in October, down from 136K previous, and the unemployment rate is anticipated to tick higher to 3.6%. The key focus, however, will remain on average hourly earnings, which are forecasted to rise by 0.3% MoM/3.0% YoY and influence the pair’s next leg of a directional move.
Technical levels to watch
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