- The US dollar initially rallied a bit during the trading session here on Monday only to give back the gains to show signs of exhaustion. In fact, it looks as if we are possibly going to form a shooting star in what already is a downtrend. So, the question now is, is the US dollar selling continue? It looks like it is here, and in some other pairs as well.
- we'll have to wait and see, but really at this point in time, it's very important to recognize that the Swiss Franc is considered a safety currency. So, we will even in a scenario where people run to the U S dollar for safety, they may run to the Swiss Franc a little quicker. So, what this tells me is that the US dollar continues to be on the back foot.
- But when you look around the world and the various currency pairs, you have to understand that this also can be thought of as a signal for the Swiss franc. So maybe short the pound against the Swiss franc or other currencies that may struggle right now. That isn't the case, but that could be what this turns into.
US Dollar Softened Overall on Monday
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Right now, at the moment, it's more or less all about the US dollar taking it on the chin during the trading session, we'll just have to wait and see how this plays out. But if we break down below the 0.79 level, I don't really see too much of a trouble reaching the lows again, if we turn around and break above the 0.80 level, then the 0.81 level might get targeted. It is worth noting that the 50 day EMA is right there at the 0.80 level as well. So that of course is something to pay attention to. Expect choppy volatility, but right now it looks like we're at least going to try to roll over.
Potential signal: I would sell the USD right here, with a small position and a stop loss at 0.8005 above. Target would be 0.7880 below.
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