- The US dollar initially pulled back just a bit during the trading session on Monday, only to turn around and show signs of life again.
- We continue to watch the same area time and time again at the 0.80 level, a large round psychologically significant level that has been important a couple of times in the past.
If we can break above the 0.80 level, then it almost certainly opens up a move to the 0.8 one level where we have seen previous massive support. That is an area that you would expect to see a lot of resistance. That being said, we also have the 50 day EMA sitting just above there. And if we can break above there, then the market, I think, changes its overall attitude.
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All things being equal, this is a market that I think continues to see a lot of volatility and choppiness, but overall, this is a market that the market is trying to get on its feet again. And with interest rates in the United States rising a bit during the trading session, it does make a certain amount of sense that we've seen the U.S. dollar strengthen slightly against the Swiss franc. But remember, there are a lot of concerns out there right now, and that has a very positive effect on the Swiss franc. The Swiss franc, of course, is considered to be the paramount safety currency for traders around the world. And you would have to consider that to still be the case. If we were to break down below the 0.79 level, then I think this is a situation where the bottom falls out of the market and it goes much lower.
Swiss National Bank?
That being said, I would be concerned about the Swiss National Bank because the Swiss National Bank is a central bank that does not hesitate to come in and short its own currency if it gets out of control. Now, having said that, the Swiss won't be doing that against the US dollar, particularly it's really the Euro that they are more worried about.
But watching this, you have to question, is this a market that's in the middle of a bottoming pattern? It might be a break above the 0.80 level would be a very good sign, but it's really not until we clear 0.81 that I truly start to be interested in trying to perhaps play a trend change.
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