- USD/CHF moved closer to 0.8800, setting up a five-day winning streak.
- Encouraging ADP numbers were reported in the US, which strengthened the USD.
- The DXY index is rising and is trading at 102.65.
The pair USD/CHF it has reached its highest level since mid-July, towards 0.8800 and then stabilized near 0.8770, buoyed by a stronger USD. In simple terms, the US economy remains strong, which makes investors bet more on the Federal Reserve (Fed), which benefits the dollar.
The number of people employed in the US was 324,000 in July, according to Automatic Data Processing Inc. (ADP), higher than expectations of 189,000, but lower than the revised figure of 455,000 in June.
US bond yields rise globally in response to the data. The 5-year and 10-year yields increased by 4.26% and 4.10%, respectively, and both posted increases of more than 1%. The 2-year yield rose to 4.92%, up 0.60% on the day.
As for the Fed’s expectations, according to the CME’s FedWatch tool, market participants are betting on a low probability of a September hike, while the probability of a November hike is close to 30%, and investors expect low probability of a rise of 50 basis points. However, the most prominent piece of data that markets will forecast on will be Friday’s Non-Farm Payrolls (NFP) report. The unemployment rate is forecast to hold steady at 3.6% while the consensus for NFPs has risen to 200,000 from 209,000 in June, while average hourly earnings are expected to have declined.
For the rest of the session, the Swiss and American calendars will not have anything relevant to offer, so market sentiment and bets on the Fed will set the pace.
USD/CHF levels to watch
Considering the daily chart, the USD/CHF shows a bullish sentiment for the short term. The Relative Strength Index (RSI), positioned above its midline in north-sloping positive territory, supports this view along with the positive indication of the Moving Average Divergence (MACD), which is showing green bars, pointing towards strengthening bullish momentum. Furthermore, it is consolidating above the 20-day SMA, indicating that the outlook remains positive in the near term.
Resistance levels: 0.8810, 0.8830, 0.8850.
Support levels: 0.8700 (20-day SMA), 0.8660, 0.8630.
USD/CHF Daily Chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
