USDCHF on Friday rose 0.69% to 0.85788. Week ending 2024-10-04 rose 2.07%. What’s going on.

USDCHF Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.69%	58.7 Pips
Week 2024-10-04	2.07%	173.8 Pips	October	1.49%	125.7 Pips

Upcoming key events for the new week (London Time)

Wed 07:00 PM FOMC Meeting Minutes
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM CPI Inflation Rate (12-mth)
Fri 01:30 PM Producer Price Index (12-mth)

What happened over the week

The United States labor market exhibited some positive trends as indicated by recent reports. The unemployment rate saw a slight decline from 4.2% in August to 4.1% in September, according to the Bureau of Labor Statistics, which suggests improving employment conditions. The U-6 Total measure, reflecting broader labor underutilization, also dipped from 7.9% to 7.7%. Nonfarm payrolls increased significantly by 254,000 in September, exceeding expectations, particularly from a recalibrated figure of 159,000 from 142,000. Nevertheless, there was a slight reduction in the growth rate of average hourly earnings to 0.4% month-on-month, down from 0.5% in the prior month; although, on an annual basis, the earnings growth picked up from 3.9% to 4%. Meanwhile, manufacturing orders witnessed a marginal contraction of 0.2% in August. Furthermore, initial unemployment claims edged up to 225,000 by the end of September, as reported by the Department of Labor, evidencing a hint of caution in labor demand. Lastly, JOLTS data indicated an upward movement in vacancies, reaching 8.04 million positions, up from 7.711 million in July.

In Switzerland, the inflation rate showed signs of easing, with the 12-month Consumer Price Index (CPI) reducing from 1.1% in August to 0.8% in September, as noted by the Federal Statistical Office. The monthly CPI also saw a decrease, moving to -0.3% from a stagnant 0% in August. On the other hand, the retail trade real turnover in August displayed growth, rising to 3.2% from 2.9% in July.

The recent performance of USDCHF has been on an upward trend, rising 0.69% to 0.85788 on Friday and gaining a substantial 2.07% over the week ending October 4, 2024. The positive labor market developments in the U.S. are likely bolstering the U.S. dollar. The decrease in unemployment rates and the notable increase in nonfarm payrolls provide a reinforcing narrative for a robust economy, thereby attracting investors to the dollar. In contrast, the Swiss franc, facing lower inflation and a stable retail sector, does not present a strong counter to the dollar’s ascendancy. Upcoming high-impact U.S. economic releases, such as the FOMC meeting minutes and the CPI inflation rate, may further influence the USDCHF pair’s trajectory. Should forthcoming data further support economic resilience and potential monetary tightening in the U.S., the dollar might continue strengthening against the franc.

From X (Twitter)

In September, Swiss inflation weakened to the slowest pace in more than three years, pointing to further monetary easing by the country’s central bank. #Swiss #Switzerland https://t.co/kRkXHQk971

— swissinfo.ch (@swissinfo_en) October 4, 2024

What can we expect from USDCHF for the new week and what happened on Friday?

USDCHF on Friday rose 0.69% to 0.86. Price is above 9-Day EMA while Stochastic is rising. For the week ending 2024-10-04, the pair rose 2.07% or 173.8 pips higher.

Looking ahead, USDCHF looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 0.86 (WR1) with break above could target 0.87 (WR2). On the downside, we are looking at week low of 0.84 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.86 would suggest bullish bias after recent positive movement.

For the month of October, USDCHF is up by 1.49% or 125.7 pips higher.

Weekly key levels to watch out:

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Manufacturers’ Shipments, Inventories, and Orders Source: Census Bureau
Personal Consumption Expenditures by State, 2023 Source: Bureau of Economic Analysis
Swiss Consumer Price Index in September 2024 – Consumer prices fell by 0.3% in September Source: Federal Statistical Office
U.S. International Trade in Goods and Services Source: Census Bureau
Construction Spending Source: Census Bureau
Swiss retail trade turnover rose by 1.9% in August 2024 Source: Federal Statistical Office
Powell, Economic Outlook Source: Federal Reserve
U.S. International Trade in Goods and Services Source: Census Bureau