Looking for USD-related trades ahead of Uncle Sam’s jobs data releases on Thursday and Friday?
Take a look at USD/CHF hanging out near a trend support:
In case you missed it, the FOMC meeting minutes released yesterday showed that “almost all” Fed members voted for the June rate hike pause, while “some” favored raising the Fed’s interest rates by another 25 basis points.
Meanwhile, SNB governing board member Andrea Maechler said earlier today that further rate hikes “cannot be ruled out.”
The hawkish Fed meeting minutes didn’t seem to do the dollar much favor against the franc, as USD/CHF dipped from the .8990 resistance to test the .8970 support.
Will USD keep losing pips against CHF?
USD/CHF’s current prices line up with a trend line support that’s been around since the start of the month.
Not only that, but it’s also near the S1 (.8960) Pivot Point level and the 200 SMA on the 15-minute time frame.
The cherry on top of the sweet setup is Stochastic chillin’ at the chart’s oversold area while USD/CHF hits almost half of its daily average volatility.
Let’s see if today’s U.S. jobs releases can make or break USD/CHF’s uptrend.
Word around is that the U.S. initial jobless claims, ADP report, Challenger job cuts, and JOLTS job orders scheduled today will paint a picture of a weaker labor market.
If the numbers are disappointing enough, then traders could price in a less hawkish monetary policy path for the Fed. USD/CHF could weaken some more and break below its support areas.
For now though, I’m leaning towards the Fed keeping its hawkish rhetoric despite some labor market weakness.
USD/CHF could bounce from its trend line support and revisit the .8980 Pivot Point level if not the .8990 previous resistance or .9000 weekly highs.
If USD/CHF doesn’t hit the profit targets that I’m looking at, then I’ll consider closing any positions ahead of the actual U.S. NFP release.
How about you? How are you planning on trading this setup?
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