Euro rebounds after yesterday's carnage: Swiss fades

Daily forex winners & losers

A stronger than expected nonfarm payroll report saw a boost in risk appetite early in the U.S. session, with the euro surging 0.64% against the greenback an hour into North American trade. The U.S. economy created 117K jobs last month, besting calls for a read of just 85K, with the private sector jobs growing by 154K. Although the data initially saw a boost in the dollar, a turn in risk appetite saw traders seeking yields, weighing on the dollar which fell against all its major counterparts soon after the print.

The gains are likely to be short-lived, however, as ongoing concerns about the situation in Europe and global growth prospects weigh on investor sentiment. The euro climbed as high as 1.4230 before rebounding off the 50% Fibonacci extension taken from the Aug. 1 and Aug. 3 crests. Interim resistance holds here, with subsequent ceilings eyed higher at the 38.2% extension at 1.4250 backed by upper-bound trendline resistance just shy of the 1.43-figure. Support rests at the 61.8% extension at 1.4280 followed by 1.4140 and the 1.41-figure. A break below this level sees targets at the 1.4060 mark, backed by 1.4040.

Key Levels/Indicators USD/EUR

Level/Indicator

Level

50-Day SMA

1.4332

20-Day SMA

1.4237

10-Day SMA

1.4300

2011 EUR High

1.4939

The Swiss franc was relatively subdued on today’s jobs report, holding between the 76.4% and 100% short-term Fibonacci extension taken from the July 31 and Aug. 1 crests. The swissie is likely to re-take these losses as the knee-jerk reaction to the nonfarm payrolls fades, with downside target eyed at the 0.76-figure, 0.7530 and the 161.8% extension at 0.7490. Topside resistance holds at the 76.4% extension at 76.80 backed by 0.7715 and the 50% extension at 0.7740. Swissie price action will be largely dictated by risk appetite today as markets digest this morning’s employment report.

Key Levels/Indicators USD/CHF

Level/Indicator

Level

50-Day SMA

0.8270

20-Day SMA

0.8021

10-Day SMA

0.7838

2011 CHF High

0.7605

Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.

Twitter: @MBForex
WEB: www.fxcm.com

About the Author
Michael Boutros Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.
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