USD/CHF drops further and erases Tuesday’s gains

A stronger Swiss franc across the board weakened further the USD/CHF pair that printed a fresh daily low at 0.9732 during the US session. 

Important reversal

Yesterday the pair rose for the third consecutive day and peaked at 0.9828, hitting a 3-week high but lost strength and ended the day under 0.9800. Today it moved with a bearish bias all day and accelerated the decline during the American session while EUR/CHF and GBP/CHF also turned south. 

At the moment of writing USD/CHF was trading at 0.9740/45, down 45 pips for the day and less than 10 pips above the level it opened on Tuesday. 

Today’s slide so far has been capped by the 20-day moving average that stands at 0.9730/35. From here the US dollar is attempting to recover. A break and a consolidation significantly below the mentioned moving average could open the doors for an extension of the downside move toward 0.9650. 

Economic numbers before NFP

In the US, today was a busy day regarding economic data. Initially, the ADP employment report showed a solid labor market but numbers below expectations as private payrolls rose by 154K in September below the 166K expected. Then factory orders rose a 0.2% in August and the ISM non-manufacturing index climbed to 57.1 in September from 51.4 the previous month and above the 53.0 of consensus. 

Tomorrow in the US the relevant report will be initial jobless claims and the most important of the week will be on Friday with the official employment report.  In Switzerland, on Thursday, inflation data will be released and on Friday data on foreign currency reserves.