- The US dollar has been all over the place in my daily analysis, and as for the USD/CHF pair is concerned, it’s obvious that we are at the top of a strong move.
- It’s worth noting that the 0.8650 level has been a bit of a barrier over the last several days, and I think if we can break above there it’s likely that the market could go much higher.
- Ultimately, at that juncture, I would expect that we would go looking to the 200 Day EMA, closer to the 0.8750 level.
On the other hand, if we were to pull back from here, I think that the 50 Day EMA comes into the picture near the 0.8575 level, as a potential dynamic support level. Anything below there could open up a deeper correction down to the 0.8550 level. However, I do think that there is enough support in momentum to the upside that we need to keep this bullish attitude in mind.
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Now that we are between the 50 Day EMA and the 200 Day EMA, you quite often will see a bit of a “squeeze in the market” as traders try to determine where the longer-term trend is going to end up. I would postulate here that the 0.84 level is a massive amount of support just waiting to happen, as it goes back several years as being important. The fact that we have bounced so hard from there should not be a huge surprise, and now I think we are in the process of trying to turn things around and have a longer term uptrend.
In the last couple of days, we have seen rates spike in the United States in the bond market, so that does keep a little bit of a bit in the US dollar. Ironically, this is one of the few pairs that the US dollar strengthening is actually a potential “risk on” signal, because the Swiss franc of course is considered to be “ultimate safety.” As things stand right now, I like the idea of buying dips going forward.
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