Jobs shock fuels swissie rally, dollar supported

The Swiss franc is the top performer against the greenback for the third consecutive session with an advance of more than 1.8% in early North American trade. Today’s much anticipated August non-farm payrolls report shocked investors with a flat read, suggesting the US economy failed to net any new jobs last month. The data slammed risk appetite with the swissie remaining well supported below the 23.6% Fibonacci extension taken from the July 1st and August 29th at the 0.79-figure. Interim resistance holds here with the swissie likely to settle around these levels as trade thins ahead of the holiday weekend. Subsequent ceilings are eyed at 0.7950, the 0.80-handle, and the0.8075. Support rests with at the 38.2% extension just below the 0.77-figure backed by 0.7650 and the 50% extension at 0.7525.

Key Levels/Indicators

Level/Indicator

Level

50-Day SMA

0.8024

20-Day SMA

0.7840

10-Day SMA

0.7993

2011 CHF High

0.7124

The Canadian dollar was the weakest performer an hour into US trade, sliding more than 0.70% against the greenback. Weaker than expected jobs data continues to weigh on future growth prospects for the world’s largest economy, with its largest trading partner likely to feel the effects of the sluggish recovery. Also putting pressure on the loonie is a 3.1% decline in crude oil prices, one of Canada’s largest exports. The USDCAD pair broke above the 38.2% Fibonacci extension taken from the June 27th and August 8th crests at 0.9810 before losing running out of steam at the 0.9830 interim resistance level. The US dollar is likely to pair some of these gains as the move may be overdone here with RSI moving into overbought territory. Interim support rests at former resistance at the 38.2% extension with subsequent floors seen at the 50% extension at 0.9750 and 0.9730. A breach above 0.9830 sees topside targets at 0.9850 and the 23.6% at 0.9880.

Key Levels/Indicators

Level/Indicator

Level

50-Day SMA

0.9698

20-Day SMA

0.9843

10-Day SMA

0.9826

2011 EUR High

0.9406

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

Twitter: @MBForex
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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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