- The US dollar has broken significantly to the downside to reach towards the 0.84 level.
- Then it turned around to show signs of whether or not the 0.84 level will offer a bit of a floor.
This is a market that has been, or likely than not reacting to the longer term attitude of the market and the long term support that has been important multiple times. If we turn around and break above the 0.850 level, an area that has seen significant resistance and if we were to break above there then it's likely that we could go looking to the 0.850 level.
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Choppiness and Volatility
In general, this is a market that continues to see a lot of volatility and that does make a certain amount of sense considering that both of these are safety currencies. But quite frankly, a lot of people are focusing on the fact that the Federal Reserve is likely to be cutting rates later this year. The next meeting, the September 18th meeting is most certainly live and it's likely that we could see a bit of a rate cut, perhaps 25 basis points coming out of Washington, but at the same time, the Swiss National Bank is very loose with monetary policy. And I do think that it is probably only a matter of time before they get very aggressive because quite frankly, as the Swiss franc strengthens, it causes havoc for a smaller economy like Switzerland. With that being said, I'm looking for buying opportunities, but I need to see that 0.8550 level broken to the upside to start buying.
All things being equal, this is a market that I think continues to see a lot of questions asked about the global economy, and traders will trade this pair accordingly. Quite frankly, if we get more of a risk on type of attitude, that should send this pair higher.
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