Swiss Franc’s Decline After US Nonfarm Payrolls

• The Swiss Franc (CHF) sold off in most of its major pairs on Friday after the release of a better-than-expected US jobs report supported risk appetite, driving flows away from the safe-haven Franc. The Swiss Franc has lost 0.48% against the US Dollar, while it is down 0.19% and 0.15% against the Euro and Pound Sterling, respectively.

The Swiss Franc is weakening versus the US Dollar on Friday after the release of the US Nonfarm Payrolls report shows the US created a higher-than-expected number of jobs in November, reflecting a strong labor market. 199K new positions were filled, according to the US Bureau of Labor Statistics report, when a figure of 180K had been expected by economists. The report also showed that the US Unemployment Rate fell to 3.7% in November, from 3.9% in October. No change had been expected. Average Hourly Earnings came out at 0.4%, beating expectations of 0.3% and suggesting wage inflation pressures could be building. Hours Worked also rose, suggesting more full-time positions filled. The higher wage data and stronger employment metrics in general indicate the US economy is healthier than thought and that fresh inflationary pressures may yet emerge. The data could make the Federal Reserve keep interest rates higher for longer and think twice before cutting interest rates. Higher-for-longer interest rates will benefit the US Dollar since they are a magnet for capital inflows. The next big release for the US Dollar is the preliminary Michigan Consumer Sentiment Index out at 15:00 GMT, which is estimated to show a rise to 62 from 61.3 in December.

• The pair is rising after having completed a Measured Move price pattern during October and November. Measured Moves are three wave patterns that look like large zig-zags. The first and third waves are usually of a similar length. Wave C completed after achieving the same length as A. This further reinforces the bullish reversal since the December 4 lows.

US Dollar vs Swiss Franc: Daily Chart

The MACD has completed a bullish cross (circled) in negative territory, adding more evidence, signaling potentially more upside on the horizon.

The short-term trend is bullish, and more gains are possible. » … Read More rnrn