• Non-farm payroll rise by 263K in September, in line with expectations.
• US dollar rises across the board, as US yields soar.
• USD/CHF jumps to test recent highs around 0.9950 and retreats.

Boosted by a rally of the US dollar following the NFP, the USD/CHF pair rose to test the 0.9950/60 key resistance area and then pulled back. The pair hit a weekly high at 0.9953 and then retreat to 0.9915.

The zone around 0.9950/60 continues to be a critical support that capped the upside last week and also on Friday. A consolidation above could trigger more gains for the dollar. While as long as it remains below, the Swiss franc could recover ground. The immediate support is seen at 0.9915 followed by 0.9875 and then the weekly low at 0.9780.

After the report, US yields jumped with the 2-year approaching the top, near 4.35% and the 10-year hitting levels above 3.90%. The DXY jumped to 112.83, a fresh weekly high and then pulled back, trimming gains. It is up by just 0.25%, hovering around 112.50.

NFP cooled in September, job market still strong

The US Labor Department reported on Friday that the jobs in the US economy (Non-farm payrolls) rose by 263K in September, above estimates of 250K. The Unemployment Rate dropped unexpectedly from 3.7% to % to 3.5%.

“The unemployment rate returned to a 50-year low of 3.5% through a combination of solid job growth and a roughly flat labor force. Wage growth moderated slightly but remains well above rates that are consistent with the Fed's 2% inflation target. We continue to look for the FOMC to hike its policy rate by 75 bps at its November meeting”, explained analysts at Wells Fargo.

Despite Monday’s US holiday (Columbus Day), next week’s calendar is busy with the FOMC minutes on Wednesday, CPI on Thursday and retail sales on Friday. Those numbers will likely weigh on expectations about Fed’s monetary policy.

Technical levels