USD/CHF forecast: More gains likely ahead of Swiss jobs data

The USD/CHF price continued its bullish trend on Monday morning as investors focused on the strong American jobs data. The pair is trading at 0.9261, which is about 0.92% above the lowest level last week. 

Swiss unemployment rate data

The USD/CHF pair has been in a strong bullish trend in the past few days as focus shifts to the possible divergence between the Fed and the Swiss National Bank (SNB).

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

On Friday, data by the Bureau of Labor Statistics (BLS) showed that America’s non-farm payroll data jumped to over 467k in January. That was a big surprise considering that a previous estimate by ADP showed that the private sector actually lost more than 301k jobs in January.

Further data revealed that the unemployment rate rose slightly from 3.9% to 4.0% while the participation rate continued to increase. Wage growth also continued to increase.

Therefore, the USD/CHF pair jumped because the strong jobs numbers give the Federal Reserve more impetus to accelerate its tightening process later this year. The Fed has already hinted that it will phase out its quantitative easing (QE) policies in March and then start hiking interest rates.

Meanwhile, the Swiss National Bank is expected to continue being a bit dovish in its bid to continue devaluing the Swiss franc. Historically, the SNB prefers a weak franc in its bid to boost exports.

On Monday, the Swiss statistics agency will publish the latest unemployment rate data. Analysts expect that the headline rate rose slightly to 2.6% in January. 

USD/CHF forecast

The four-hour chart shows that the USD/CHF pair has been in a strong bullish trend in the past few days. It is trading at 0.9261, which is about 0.92% above the lowest level last week. It has moved slightly above the 25-day and 50-day moving averages. It is also slightly below the key resistance level at 0.9278, which was the highest level on January 11th. The Relative Strength Index (RSI) has also been in an upward trend. Therefore, there is a likelihood that the pair will continue its bullish trend as bulls target the next key level at 0.9278.