USD/CHF bulls flirt with three-week high around 0.9750 ahead of US NFP

• USD/CHF retains five-day uptrend, grinds higher of late.
• Risk appetite improved amid absence of fresh catalyst to amplify recession woes.
• Softer data, pre-NFP consolidation also played their roles to adjust market moves.
• US jobs report for June will be important considering hopes of 0.75% rate hike.

USD/CHF grinds higher as the bulls poke the 50-DMA hurdle surrounding 0.9740 for the third consecutive day during Friday’s Asian session. The Swiss currency (CHF) pair recently benefited from the improvement in the market sentiment, as well as the firmer US dollar, ahead of the key US jobs report for June.

Risk-aversion eased the previous day as major policymakers repeated previous comments while trying to tame the recession fears. Also keeping the market hopeful were headlines concerning China and mixed data from the US.

China is up for $220 billion of stimulus with unprecedented bond sales, per Bloomberg. On the same line was news that diplomats from the US and China are up for meeting personally after the latest virtual meeting cited progress in trade talks. With this, Beijing is optimistic that it can help ease the US its inflation problem by solving the supply-chain riddle, the same gained fewer accolades from the experts though.

Talking about the data, US Initial Jobless Claims rose by 4,000 to 235,000 in the week ending July 2, versus 230,000 expected. With this, the 4-week moving average number was 232,500, up 750 from the previous week's average. Further, the US goods and services deficit narrowed by $1.1 billion to $85.5 billion in May, marking the smallest monthly deficit in 2022.

Elsewhere, Fed speakers, CEO of the Federal Reserve Bank of St. Louis. James Bullard stated, per Reuters, “We've got a good chance at a soft landing.” Additionally, Federal Reserve Governor Christopher Waller said inflation is way too high and does not seem to be easing and the Fed has to apply a more restrictive policy.

Amid these plays, the US Treasury yields regain upside momentum and the Wall Street benchmarks closed with gains. However, the S&P 500 Futures print mild losses by the press time.

Moving on, risk catalysts are important for the USD/CHF pair traders to watch ahead of the US employment data. the monthly increase in jobs since April last year, by easing to 268K from 390K for June while the Unemployment Rate is likely to stay unchanged at 3.6% for the said month.

Also read: Nonfarm Payrolls Preview: Three dollar-positive scenarios, only one negative one

Technical analysis

50-DMA challenges USD/CHF bulls around 0.9740 since Wednesday. Given the recently firmer RSI, the odds of the pair’s upside break to the aforementioned hurdle appear high.