USDCHF advances on sanguine U.S. jobs report
American employers created 280,000 jobs in May, where both March and April readings were upwardly revised, adding to signs the labor market is solid.
The green currency received a boost against majors after the release of the upbeat jobs report, as expectations soared the Fed would not wait until late this year to raise its borrowing cost.
On the other hand, a report released on Friday showed that Switzerland’s foreign currency reserves declined to 517.5 billion Swiss francs in May from 522.2 billion francs in April.
The Swiss franc advanced against the dollar in April, but in May and so far in June, the dollar is showing strength.
While a weak franc would bolster Swiss exports and thereby growth, strong dollar could negatively weigh on the U.S. economy.
The dollar already is “moderately overvalued” and further advance of would be harmful to the U.S. economy, the IMF said on Thursday.
Similarly, Swiss National Bank’s Chairman Thomas Jordan said, “the franc is significantly overvalued and should therefore weaken over time.”
The USDCHF pair is currently trading around 0.9440 after visiting a high of 0.9500, while the session’s bottom was recorded at 0.9297.
The pair set a new high of the NFP, but then surrendered some of its gains as it hit 38.2% Fibo resistance for the downside wave that began March 12.
The USDCHF rose after climbing above SMA 20 but halted its advance as it hit SMA 50.
The Stochastic Oscillator indicator is showing a bullish sign, helping the pair to rise by giving it some momentum.