- USD/CHF gains some traction on Friday amid the prevalent risk-on mood.
- Persistent trade uncertainty, subdued USD demand might continue to cap.
- The focus will remain on the closely-watched US monthly jobs report.
The USD/CHF pair traded with a mild positive bias through the early European session on Friday, albeit lacked any strong follow-through and remained capped below the 0.9900 handle.
The pair continued with its struggle to register any meaningful recovery from one-month lows set on Wednesday and has been oscillating in a broader trading range over the past three trading sessions amid persistent trade uncertainty.
Upside seems limited, NFP awaited
China reiterated its expectations that tariffs should be lifted as part of a phase-one deal. This comes on the back of a Bloomberg report on Wednesday that both sides are moving closer to a trade deal before the December 15 tariffs deadline.
On the other hand, the US President Donald Trump on Wednesday said that talks with China were going very well, a complete turnaround from a previous statement that a deal may not come until after the 2020 US presidential election.
Despite conflicting trade signals, the prevalent risk-on mood weighed on the Swiss franc’s perceived safe-haven status and turned out to be one of the key factors assisting the pair to regain some traction on the last trading day of the week.
However, a subdued US dollar demand did little to provide any additional boost and might continue to keep a lid on any strong recovery ahead of the release of the closely-watched US monthly jobs report, popularly known as NFP.
Hence, it will be prudent to wait for some strong follow-through buying in order to confirm that the pair might have bottomed out and positioning for a move back towards the very important 200-day SMA.
Technical levels to watch
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