- Risk-off market sentiment triggers a flight into safe-haven flows and propels the dollar against the Swiss franc.
- Central banks around the world, undecided whether to attack inflation or stimulate growth
- The ADP report beat analysts’ expectations, raising the Fed’s QE downside prospects.
The USD/CHF It is rising for the second day in a row, trading at 0.9277, just up 0.04% during the American session at the time of writing.
High energy prices and rising bond yields are the main drivers for the day. Central banks around the world are struggling to attack inflation, which hurts economic growth, or sustain the stimulus on the assumption that price increases are temporary, as Fed Chairman Jerome Powell commented. .
The 10-year US Treasury yield is down just one basis point and stands at 1.51%. The US dollar index, which tracks the performance of the dollar against its peers, is up 0.41% to 93.34, supporting USD / CHF price action.
First US jobs report backs Fed bond phasing out prospects
On the macro front, the US ADP report, which measures the hiring of private companies, showed that hiring rose to 568,000 in September, much better than the 428,000 expected by investors. Furthermore, the report added that the labor shortage should disappear as health conditions linked to the COVID-19 variant improve.
The ADP report added to the prevailing optimism of Federal Reserve Chairman Jerome Powell, who said that a good employment report would convince him of the bond reduction process.
On Thursday, the economic docket will feature Initial Unemployment Claims for the week ending October 1, which would provide additional clues on the job market in anticipation of the Non-Farm Payrolls report, to be released on Friday.
USD / CHF Price Forecast: Technical Outlook
USD / CHF is trading well above the daily moving averages (DMAs), supporting the bullish bias, but in the last hour or so, the pair has come under pressure from a solid resistance at 0.9307, which limited the move. .
For buyers to resume the uptrend, they need a daily close above 0.9307. In case of that result, the next resistance levels would be 0.9332 and 0.9367
On the other hand, the failure at 0.9300 could motivate sellers to put downward pressure on the pair. The first support would be 0.9230, followed by 0.9215.
The Relative Strength Index (RSI) is at 55, flat, suggesting that the USD / CHF pair could consolidate before resuming the bullish move.
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