- The US dollar rallied quite nicely during the trading session on Monday, testing the 50 Day EMA during the day.
- All things being equal, this is a market that I think continues to watch the 0.81 level very closely, as it has been important multiple times, and if we can break above the high of the Friday trading session, that would be extraordinarily bullish as well.
- Keep in mind that this is a market that looks like it is trying to form some type of bottoming pattern, so the first thing that I would say about this pair is that you need to pay close attention to it and be cautious about trying to force the trade, and then simply take your time collecting profit.
Interest Rate Differential
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The interest rate differential obviously favors the United States dollar, so therefore it’s worth noting that if you do in fact try to buy this market, you do get paid to wait for the market to jump in your favor, assuming it does. I prefer collecting swaps, so that’s one of the most important parts of my trading system, and this is a pair that I love to do that with, but I also recognize that there are a lot of concerns out there, and of course the Swiss franc is a major safety currency overall.
If we can break above the top of the candlestick from the Friday session, I think that is very likely going to be a situation where we could go looking at the 0.83 level, possibly even the 200 Day EMA. Short-term pullbacks at this point in time continue to see support near the 0.80 level, maybe even the 0.79 level. Ultimately, I do think that you have a lot of choppy noise more than anything else, but I am doing everything I can to hang on to a long position and get paid along the way.
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