USD/CHF remains below 50-day SMA hurdle near 0.8540 ahead of US NFP

• USD/CHF consolidates in a range below the 50-day SMA as traders await the US NFP report.
• A modest USD pullback from a one-month high is seen as a key factor capping the major.
• Reduced bets for a 50 bps Fed rate cut in November lend support to the USD and the pair.

The USD/CHF pair reverses an intraday dip to the 0.8500 psychological mark and climbs back closer to a three-week top during the first half of the European session on Friday. Spot prices, however, remain below the 50-day Simple Moving Average (SMA), warranting some caution for bullish traders ahead of the release of the US monthly employment details.

The popularly known US Nonfarm Payrolls (NFP) report is expected to show that the economy added 140K jobs in September, slightly lower than the 142K in the previous month, and the Unemployment Rate held steady at 4.2%. Apart from this, Average Hourly Earnings might provide cues about the size of the Federal Reserve's (Fed) rate cut in November. This, in turn, will play a key role in driving the US Dollar (USD) demand and determining the next leg of a directional move for the USD/CHF pair. 

Ahead of the key data, some repositioning trade drags the USD Index (DXY), which tracks the Greenback against a basket of currencies, away from a one-month high touched on Thursday. This, in turn, acts as a headwind for spot prices amid a further escalation of geopolitical tensions in the Middle East. That said, reduced bets for an oversized rate cut by the Federal Reserve (Fed) in November limit the USD losses and support prospects for a further appreciating move for the USD/CHF pair.

Nevertheless, spot prices seem poised to register strong weekly gains, though remain confined in a multi-week-old trading range. This makes it prudent to wait for sustained strength and acceptance above the 50-day SMA hurdle, around the 0.8540 region, before positioning for an extension of this week's goodish rebound from sub-0.8400 levels, or the lower end of the short-term range.