USD/CHF remains below 100-day SMA ahead of Swiss CPI, Retail Sales

• Broad risk-off keeps USD/CHF on the back foot.
• Trade worries join geopolitical tension and weakness in early-Asia data.
• Investors await fresh clues from Swiss catalysts ahead of US jobs report.

While a broad wave of risk aversion dragged the USD/CHF pair to more than a week’s low during the early Asian session, pair’s latest bounce lacks strength to cross 100-day SMA. The quote seesaws around 0.9860 by the press time of initial trading session on Friday.

Speculations of the trade deal between the United States (US) and China have been the sole fuel for the market’s risk sentiment off-late. The recent swing in tone seems to have emerged after the US Secretary of State criticized China and the dragon nation’s diplomats losing hopes of any stronger trade ties with the US beyond the phase one deal.

Also adding to the risk aversion could be the closing statements from the closed-door meeting of China’s ruling Communist Party. The CCP “warned that internal and external risks were increasing after wrapping up it's a most important meeting of the year,” said Bloomberg.

Further, North Korea’s another missile test and fresh US sanctions on Iran join downbeat data from Australia, New Zealand and Japan during early Asian hours.

With this, the US 10-year treasury yields stay mostly unchanged after losing nearly 7 basis points (bps) to 1.69% by the press time whereas Asian equities are on the back foot during its naïve trading hours.

Markets will now focus on Swiss Consumer Price Index (CPI) and Real Retail Sales for October and September month respectively ahead of focusing on the US employment data for October. Forecasts suggest 0% figure for both MoM and YoY Swiss CPI against -0.1% and +0.1% respective priors. It should also be noted that Real Retail Sales have -1.4% as previous.

For the US jobs report, TD Securities says, “We expect payrolls to increase by a small 70k in October, following the on-consensus 136k August print. Jobs in the goods sector will print negative largely reflecting GM’s strike and the ensuing spillover into GM's auto suppliers. All in, the household survey should show the unemployment rate ticked up to 3.6% in October, while we expect wages to rise 0.2% m/m, lifting the annual rate a tenth to 3.0% y/y.”

Technical Analysis

Prices keep targeting October month low of 0.9837 and September bottom around 0.9800 unless breaking 100-day Simple Moving Average (SMA) level of 0.9872, which in turn could recall 0.9930 and 0.9970 on the chart.