USD/CHF climbs to over two-week high post-NFP, eyeing mid-0.9200s

• USD/CHF gained some positive traction on Friday and shot to over a two-week high.
• The disappointing headline NFP was offset by a larger drop in the jobless rate.
• Rising US bone yields acted as a tailwind for the USD and remained supportive.

The USD/CHF pair finally broke out of its intraday consolidative range and shot to over a two-week high, around the 0.9230-35 area during the early North American session.

The latest uptick witnessed over the past hour or so followed the release of the mixed US jobs report, which showed that the US economy added 199K new jobs in December. This was far below consensus estimates pointing to a reading of 400K, though was offset by an upward revision of the previous month's print to 249K from 210K reported early.

Moreover, the unemployment rate fell more than anticipated to 3.9% from 4.2% in November. Despite the disappointing headline NFP, additional details reinforced speculations for an eventual Fed lift-off in March. This was evident from a fresh leg up in the US Treasury bond yields, which provided a modest lift to the US dollar and the USD/CHF pair.

In fact, the yield on the benchmark 10-year US government bond rose to levels not since March 2021. Adding to this, the US 2-year notes, which are highly sensitive to rate hike expectations along with 5-year notes, climbed to a near two-year high. The USD bulls, however, seemed reluctant to place aggressive bets.

Apart from this, an intraday slide in the equity markets extended some support to the safe-haven Swiss franc and kept a lid on any meaningful gains for the USD/CHF pair. Nevertheless, the overnight sustained strength beyond the 0.9200 round-figure and the subsequent move up supports prospects for a further near-term appreciating move.

Technical levels to watch