USD/CHF hits three-week highs above 0.9150 on dollar's strength

• US dollar gains momentum across the board near the end of the week.
• Wall Street tumbles, US yield rise and CHF weakens.

The USD/CHF broke above 0.9135 and jumped to 0.9163, reaching the highest level since August 12. Near the end of the week, it is hovering around 0.9150, far from the five-year low it fell on Monday under 0.9000.

The move higher is being driven on Friday by a stronger US dollar. The greenback gained particularly against G10 currencies supported by higher US yields and despite the ongoing sell-off in Wall Street. The Dow Jones is falling 1.95% and the Nasdaq more than 3%. The risk aversion environment is not supporting the Swiss franc that is also lower versus the euro.

The US August employment report came in mixed. Payrolls rose by 1.37 million slightly below market consensus while the unemployment rate dropped to 8.4%, significantly below the 9.2% expected. The decline in the jobless rate offset payroll’s numbers.

From a technical perspective, the USD/CHF is testing the 0.9150 area that is relevant. A consolidation above would increase the odds of a test of 0.9200. The weekly chart shows the best week for the dollar since March and a potential reversal that could mean further bullish correction or some consolidation ahead. A slide under 0.9050 would negate the recovery.

Technical levels

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