USD/CHF slipped back toward 0.8086 on Wednesday after Fed Chair Kevin Warsh cooled forward-guidance expectations at the ECB’s Sintra forum. Traders now watch Thursday’s US payrolls report, which could decide whether a September rate rise stays on the table.
USD/CHF gave back its earlier advance on Wednesday, trading near 0.8086 after peaking at 0.8117, as the dollar softened following remarks from Federal Reserve Chair Kevin Warsh at the ECB Forum in Sintra. Warsh said the Fed would not offer forward guidance and would chart a new course, while adding that inflation risks had eased. The US Dollar Index held around 101.27, just under the 101.80 level reached last week.
Rate-hike bets meet cooling jobs data
The dollar’s downside stayed limited by uncertainty around US–Iran diplomacy and steady expectations for tighter policy. Markets are pricing a 67% chance of a Fed rate rise as soon as September via the CME FedWatch Tool, an outlook reinforced after US CPI inflation rose to 4.2% in May against the Fed’s 2% target.
Jobs data, however, looks softer. ADP private payrolls increased by 98K in June against 113K expected and 122K previously. In Switzerland, retail sales grew 3.5% year on year in May, ahead of Swiss CPI and the SNB Financial Stability Report.
Payrolls become the pivot
Thursday’s nonfarm payrolls report now stands as the session’s dominant release. FOREX.com notes that recent figures have delivered a string of upside surprises, so another strong print would likely lift the dollar further. With markets pricing 43 basis points of Fed tightening by next June, the risks may be skewed: a broad miss across payrolls, unemployment and wages could spark a larger move as traders unwind that hawkish pricing.
A bullish wedge holds the technical edge
The chart still favours the upside. USD/CHF trades in an uptrend above its key moving averages, and the 50-day average has crossed above the 200-day, completing a golden cross. Price has coiled into what appears to be a bullish wedge, a continuation pattern that suggests another leg higher may be brewing.
A break above 0.8140 would put 0.8150 into focus, followed by 0.8250. Should the pair reverse after payrolls, attention would shift to 0.8041, a level that capped rallies before the recent breakout, with 0.8013 the next support below it.
Sources: VT Markets, FOREX.com
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