USD/CHF reverses majority of daily gains in post-NFP action

The USD/CHF pair faded a bullish spike closer to 100-day SMA resistance and has now reversed majority of its daily gains.

Currently trading around 0.9940 region, the pair touched a 4-day peak level of 0.9982 in reaction to upbeat headline NFP print. The pair, however, quickly reversed course as further details revealed that the US unemployment rate ticked higher to 4.8% and average earning recorded a dismal growth of 0.1%, offsetting stellar jobs growth. 

Disappointment on wage growth front seems to have dampened investors’ expectations of steeper Fed rate-tightening cycle and is reaffirmed by sinking US treasury bond yields. 

Bulls, however, gained some respite on comments from the FOMC member Charles Evans and assisted the pair to hold in positive territory, at least for the time being. 

Next on tap would be the release of US ISM non-manufacturing PMI for the month of January, which is expected to hold steady near the highest level since Oct. 2015.

Technical levels to watch

A follow through retracement below 0.9925-20 immediate support is likely to drag the pair back towards 0.9890 horizontal support, which if broken would expose the very important 200-day SMA support near 0.9870-65 region.

On the upside, momentum back above 0.9965 level is likely to accelerate the up-move back towards 100-day SMA resistance near 0.9990 region, before the pair eventually heads towards testing its next resistance near 1.0025-30 region.