USD/CHF: from 4-month highs to daily lows amid risk aversion

The Swiss franc rose across the board after a Russian media reported that North Korea was ready to test a long-range missile over the weekend. The headline triggered the demand for safe-havens assets, like the Swissy, the yen and gold. 

USD/CHF erased all NFP gains and dropped back under 0.9800. After the US jobs report the pair peaked at 0.9835, the highest level since June 17. Then retreated modestly and after the North Korean headline it tumbled to 0.9770, hitting a fresh daily low. 

US data showed that NFP decreased 33K in September affected by hurricanes Harvey and Irma. On the positive side of the report, the unemployment rate eased to 4.2% (lowest since 2001) and average hourly earnings rose 0.5%, above expectations. Fed rate hike odds rose in the market after the report. The CME Group FedWatch Tool's rate hike probability climbed to 90%.

US NFP: Despite the negative headline, Fed still has the green light for December - Wells Fargo

The US dollar was unable to keep the bullish tone versus the Swissy and risks could start favoring the downside in USD/CHF if the slide extends below 0.9750. 

Levels to watch 

To the upside, resistance levels might be located at 0.9800 (Asian session high), 0.9835 (Oct 6 high) and 0.9855/60 (Jun 4 low). On the flip side, supports could be seen at 0.9765/70 (American session low), 0.9740 (Oct 5 low) and 0.9705/10 (Oct 4 low).