USD/CHF treads water around 0.9100 with eyes on US PMIs, jobs report

• USD/CHF struggles to extend two-day uptrend at the highest levels since early April.
• US Dollar lacks clear directions amid mixed sentiment, anxiety ahead of key data.
• Swiss trade numbers came in unimpressive for April.
• US preliminary activity data, employment numbers for May will be crucial for fresh impulse.

USD/CHF remains sidelined around 0.9110-15 as bulls and bears jostle ahead of the key data/events heading into Thursday’s European session. In doing so, the Swiss Franc (CHF) pair fails to justify the mixed prints of Swiss data, as well as anxiety before the top-tier events.

That said, the recent passage of the bill to overcome US default in the Republican-controlled House of Representatives underpins the cautious optimism ahead of tomorrow’s Senate voting on the debt-ceiling bill, which in turn should weigh on the USD/CHF price. On the same line, recently mixed US data and Federal Reserve (Fed) talks flag concerns that the US central bank has limited upside room for the rates. With this in mind, allowed Wall Street Journal’s (WSJ) Nick Timiraos to suggest that the Federal Open Market Committee (FOMC) is likely to hold interest rates steady in June.

Elsewhere, the Swiss Trade Balance eases to 2,601M in April from 4,526M (revised) prior. However, the Imports and Exports both rose from -22,505M and -27,031M respective previous readings to 17,302 and 19,902 in that order. It’s worth observing that the Swiss growth numbers and sentiment figures have also flashed mixed outcomes earlier in the week and prods the USD/CHF bears, mainly due to the broad US Dollar strength.

Amid these plays, the S&P500 Futures print mild gains to approach the 4,200 round figure, printing the first daily upside in three, whereas the US 10-year and two-year Treasury bond yields recover from weekly lows.

Looking ahead, the US ADP Employment Change and flash PMIs for May will be important to watch for clear directions. Also crucial will be the last round of the Fed talks ahead of the pre-FOMC blackout period for policymakers. Furthermore, the US Senators’ voting on the measures to avoid the default conditions should also be eyed closely even if the bill is likely to gain huge support in the Senate where Democrats are in the majority.

Also read: US ADP Employment, ISM Manufacturing PMI Preview: First down, then up for US Dollar?

Technical analysis

USD/CHF grinds higher within a one-month-old bullish trend channel, currently between 0.9315 and 0.9165, amid price-positive oscillators.