In Friday’s trading session, the USD/CHF pair saw a strong recovery, surging above the 0.8965 mark. This was driven by robust Nonfarm Payroll data from the US, which boosted the USD against other currencies. US Treasury yields also rose, while the likelihood of a Fed rate cut in September slightly decreased.
The latest NFP figures for May exceeded expectations, coming in at 272K compared to April’s revised 165K. This positive data has led to a decrease in the chances of a Fed rate cut in September. Additionally, the US Unemployment Rate rose to 4% from 3.9%, with a slight decline in the Labor Force Participation Rate. Average Hourly Earnings also saw growth, indicating an increase in wage inflation.
Following the release of this data, US Treasury yields spiked, making the USD more attractive to investors. On the other hand, the SNB has been easing its monetary policy, with a 25 bps rate cut in March and a predicted 55% chance of another cut in the upcoming June meeting.
From a technical analysis perspective, the USD/CHF pair has shown signs of recovery, with indicators moving out of oversold territories. The RSI is hovering near 50, suggesting a more balanced market, while the MACD is reporting smaller red bars. The pair has also moved above key SMA barriers, strengthening the short-term bullish outlook. The 200-day SMA provides further support against potential losses.