- During my daily analysis of the major currency pairs around the world, the USD/CHF pair has captured my attention as we have seen a fairly significant bounce during the trading session on Tuesday.
- which is important to pay close attention to as we are sitting at the 200 Day EMA indicator, as well as a major support level in the form of the 0.88 CHF level.
- This is a market that had previously been consolidating, and now that we have pulled back a bit to show signs of negativity, and then recovered that move, this typically sets up for a bit of continuation.
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Swiss National Bank
The Swiss National Bank has an interest rate decision on Thursday, so you need to be very cautious about the potential volatility. That being said, it’s likely that the US dollar will continue to beat up on the Swiss franc, due to the fact that the Swiss are almost certainly going to be cutting interest rates, and there is also talk about the Swiss going back to negative interest rates before it is all said and done. If that is going to be the case, then it makes a lot of sense that the Swiss franc will fall apart.
This will be exacerbated by the idea that the Federal Reserve may cut interest rates by 25 basis points in December, and simply stop there. At that end up being the case, then it’s likely that the US dollar will continue to see a lot of upward trajectory against the currencies in the European region, and of course this includes the Swiss franc. Short-term pullbacks will of course continue to attract a certain amount of attention, as traders will be looking for “cheap greenbacks.”
Underneath the 200 Day EMA, we have the 50 Day EMA indicator, which also will attract a certain amount of attention. This will most certainly be the case if we have a crossover, which would kick off the so-called “golden crossover”, when the 50 Day EMA rises and crosses above the 200 Day EMA. This is considered to be a very bullish sign for longer-term traders.
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