USD/CHF in a tight range after weak Switzerland unemployment rate data

The USD/CHF is holding steady at the lowest level since Thursday last week as forex investors react to the US nonfarm payroll numbers and the Swiss unemployment numbers.

Weak US and Swiss employment numbers

On Friday, the Bureau of Labour Statistics (BLS) published weak US employment numbers prompting a major dollar sell-off. The bureau said that the American economy added just 40,000 jobs in January as more states continued to implement lockdowns. The unemployment rate declined to 6.3% from 6.7% while wage growth increased from 5.4% to 5.6%. 

Today, the Swiss statistics office also published relatively weak job numbers. The country’s unemployment rate rose from 3.5% in December to 3.7% in January. This is the highest the rate has been since January 2017. It is also been rising steadily since November when it dropped to 3.2%. 

In total, more than 169,000 people have registered with the unemployment office. Still, the Swiss unemployment rate is better than that of comparable countries. In Germany, the rate is at 5.9% while in Sweden, it has risen to more than 8%.

In recent days, the USD/CHF has also reacted to mixed numbers from Switzerland. Last week, data from the State Secretariat of Economic Affairs (SECO) showed that consumer sentiment dropped in January. And last week, a statistics company released relatively strong manufacturing PMI data.

Later this week, the USD/CHF will react to the important US inflation numbers that will come out on Wednesday. Economists polled by Reuters expect the data to show that the overall CPI rose to 1.5% in January. Also, the pair will react to the latest jobless claims numbers and the ongoing debate on US stimulus in congress.

USD/CHF technical outlook

The four-hour chart shows that the USD/CHF price has been in a strong upward trend in the past few weeks. It has moved from the year-to-date low of 0.8756 to last week’s high of 0.9045, which is a 3.30% increase. 

The pair also broke-out above the rectangular pattern shown in pink on February 1, which is further evidence of the strength of the bulls.

On Friday, the pair dropped after the relatively weak US employment numbers. Still, the price is above the ascending blue trendline and is at the psychological important at 0.900. Therefore, the pair will remain in this uptrend so long as it is above the ascending trendline.