- During my daily analysis of the USD/CHF pair, I recognize that this is a market that has been going sideways over the last couple of weeks, and at this point in time I think we have got a situation where the market is trying to determine the next move.
- This does make a certain amount of sense considering that Friday features the Non-Farm Payroll announcement, which obviously has a major influence on the greenback itself.
Looking at the last couple weeks, it looks like a market that is trying to catch its breath after a fairly big move, as the US dollar surged against the Swiss franc. Furthermore, it’s also worth noting that the interest rates in the United States have been rising quite a bit, and that favors the US dollar over the Swiss franc, which has a very weak interest rate behind it, and of course you also have to keep in mind that there is a bit of a “knock on effect” that Europe will have on Switzerland, due to the fact that the largest destination for exports coming out of the Swiss economy is in fact the European Union.
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Technical Analysis
The technical analysis for this pair is fairly neutral at the moment, although it is worth noting that the 200 Day EMA as above, so technically we are still in a downtrend. However, we have the 50 Day EMA underneath, which of course is rising. As we are halfway between the 50 Day EMA and the 200 Day EMA indicators, it does suggest that there is probably going to be a move sooner or later.
The 0.8750 level is right about where the 200 Day EMA is at the moment, and this is an area that has been significant resistance previously. Underneath, the 0.8550 level offers significant support if we do pull back from there, as it was an area that has seen a lot of “market memory” in the past. At this juncture, I think this is a market that continues to favor the US dollar of the longer-term, but that does not mean that a pullback isn’t possible. That being said, Friday could be very noisy.
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