The release of a strong US Nonfarm Payrolls report has led to contrasting reactions in the USD/MXN and USD/CHF currency pairs. The Mexican Peso appreciated against the US Dollar, with USD/MXN testing two-year lows near 16.85 and trading at 16.88 at the time of reporting, despite the robust US jobs data. The pair appears poised to extend its losses and challenge the April 2024 lows at 16.74, with technical indicators such as the Relative Strength Index (RSI) showing increased bearish momentum. Key support levels are identified at 16.50, 16.52 (May 2024 monthly low), and the 2024 yearly low of 16.26, with further downside potential to 16.00 if these are breached. For a bullish reversal, buyers would need to reclaim the 17.00 level, with resistance at 17.07, 17.25 (50-day SMA), 17.30 (100-day SMA), and 17.48 (200-day SMA) [1].
In contrast, the USD/CHF pair registered modest gains of over 0.30%, buoyed by the same strong US Nonfarm Payrolls report. The pair climbed above the 50-day Simple Moving Average (SMA), reaching a daily high of 0.8126 before retracing to 0.8098. The technical outlook suggests that while the overall trend remains upward, a fall below the August 20 swing low of 0.7949 could trigger further declines toward the 200-day SMA at 0.7932. The RSI has turned bullish, having pierced the 50-neutral level, indicating expectations for sideways trading in the short term. Key resistance levels are at 0.8100, 0.8150, 0.8200, and the yearly high at 0.8207, while support lies at 0.8000, 0.7995 (100-day SMA), 0.7949 (August 20 low), and 0.7932 (200-day SMA) [2].
The divergent reactions highlight the varying sensitivities of emerging and developed market currencies to US economic data. While the Mexican Peso shrugged off the strong US jobs report and continued its rally, the Swiss Franc weakened modestly against the US Dollar, reflecting different market dynamics and technical setups in each pair [1][2].
CONCLUSION
The strong US Nonfarm Payrolls report prompted a rally in USD/CHF but was largely ignored by USD/MXN, which continued its downtrend. Technical indicators suggest further downside for USD/MXN and a sideways-to-bullish outlook for USD/CHF in the near term. Market participants should monitor key support and resistance levels for potential shifts in momentum.