- During my daily analysis of the currency markets, the US dollar is the clear winner, not only against the Swiss franc, but against a ton of other currencies, which of course makes quite a bit of sense.
- When you look at the bond market and how it acted.
- Yields jumped quite drastically during the trading session, and we have seen the US dollar benefit as a result.
Resistance Above
Initially, the market did fall, but the US dollar turned around and rallied as we slammed into the crucial 0.91 CHF level. If we can break above there, and more importantly, break above there on a daily close, then we could get an opportunity to start breaking out from here and going much higher. I believe the 0.92 level is an area that is the signal for the pair to go looking to the parity level, or the 1.00 CHF level.
Top Regulated Brokers
While that would be an extraordinarily bullish mood, it wasn’t that long ago the parity was fairly normal. In fact, it wasn’t that long ago that the US dollar was stronger than the Swiss franc on the whole. You can mind that despite the fact that the Swiss franc is considered to be a safety currency, quite frankly so as the US dollar. This is a scenario where both of them are safety currencies, but the economic situation in the European Union is going to be a bit of a drag on the Swiss economy, as the Swiss send 85% of their exports, or roughly so, into the EU. In other words, if you have a situation where your biggest customer is in serious trouble, that means you are in serious trouble.
Short-term pullbacks at this point in time will continue to be buying opportunities, and I am very bullish of the USD/CHF market. Not only do have upward pressure due to the yields, but you also get paid to hang on to this pair at the end of every session, and that is something that most retail traders ignore, mainly due to the fact that the average position size of retail traders make that swot payment small. However, if you can hang onto the trend, you will find it is quite profitable.
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