USD/CHF holds on to daily gains after NFP, 0.99 in sight

The USD/CHF pair came in under a renewed selling pressure and started to erase its daily gains after the release of the nonfarm payroll data from the United States. Despite this recent fall, the pair continues to trade in the positive area. As of writing, the pair was at 0.9892, still up 0.3% on the day.

Although the nonfarm payroll data from the United States came in at 211K in April, rebounding strongly from March's 98K reading and beating the expectation of 185K, the greenback was sold against its rivals, with the US Dollar Index falling to a new low since Trump's election victory at 98.55. Following the initial reaction, the index was able to gather some momentum and is now at 98.70, gaining 0.08% on the day.

Further details of the report showed that the unemployment rate fell to 4.4% from 4.5% while the participation rate was virtually unchanged at %62.9. Moreover, average hourly earnings, which translates into a higher inflation if rises, improved to 0.3% from 0.1% in April. With the NFP out of the way, the investors will closely follow the statements by Chief J.Yellen and Vice Chair S.Fischer along with San Francisco Fed J.Williams (2018 voter, hawkish) and Boston Fed E.Rosegren (2019 voter, hawkish) in the remainder of the session.

• US: Total nonfarm payroll employment increased by 211,000 in April
• US: Rebound in payrolls to keep Fed on tightening path - ING

Technical outlook

The pair could face the immediate hurdle at 0.99 (psychological level) ahead of 0.9970 (200-DMA) and 1.0015 (100-DMA). On the other side, supports could be found at 0.9810 (Mar. 27 low) ahead of 0.9735 (Nov. 8 low) and 0.9700 (psychological level).