The Swiss franc (USD/CHF) rose sharply against the US dollar even after the relatively strong Swiss unemployment rate data. The pair declined by more than 1% to 0.9170. This was the lowest level since June 26.
Swiss unemployment rate
The number of people filing for unemployment benefits in Switzerland declined in June as the country’s recovery gathered pace. More than 131k people applied for these benefits in June. This was 11,145 fewer than in the previous month.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
As a result, the country’s unemployment rate declined from 3.1% in May to 2.8% in June. Economists polled by Reuters were expecting the rate to fall to 2.9%. The Swiss unemployment rate declined from 3.2% to 3.1% on a seasonally adjusted basis.
The country’s jobless rate is substantially better than in other comparable countries. For example, the unemployment rate in the United States rose from 5.7% in May to 5.9% in June. The UK has a jobless rate of 4.8% while the Eurozone has a rate of more than 5%.
The number of job seekers in Switzerland declined by more than 10,730 to more than 226,000, according to SECO. These numbers show that the Swiss economy is recovering well, helped by the strong local and international demand. The government’s policies have also helped substantially. However, the Swiss National Bank is still battling a prolonged period of low inflation.
The USD/CHF declined sharply also because of the weak US dollar. The dollar index declined by more than 0.15% as investors reacted to the falling bond yields. The 10-year bond yield declined by more than 5% to 1.25% while the 30-year yield declined by more than 4% to 1.867%. At its peak this year, the benchmark 10-year yield was at 1.77%.
USD/CHF technical analysis
The four-hour chart shows that the USD/CHF pair formed a double-top pattern at 0.9266 a few weeks ago. The pair moved below the neckline of this pattern at 0.9195 today. It also managed to move below the 23.6% Fibonacci retracement level. It also declined below the 50-day exponential and 28-day volume-weighted moving averages.
Therefore, the path of least resistance for the pair is to the downside. This could see it decline to the 38.2% retracement level at 0.9140. On the flip side, a move above 0.9220 will invalidate this prediction.
eToro
10/10
67% of retail CFD accounts lose money
Source link