- The US dollar has been noisy during the trading session on Thursday, as noise continues to be a major factor in the markets overall.
- The US dollar of course is a safety currency, but then again so is the Swiss franc.
- With this being the case, I would anticipate seeing a lot of noise overall, and this is a market that given enough time will have to make some type of decision.
Technical Analysis
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The technical analysis for this pair is somewhat flat at the moment, but it’s worth noting that the longer-term trend has been negative. The market sits right around the 50 Day EMA, which sits right at the 0.80 level. The 0.80 level is a large, round, psychologically significant figure and will continue to attract a lot of attention in and of itself. Because of this, I would anticipate a lot of noise, but I also recognize that the market is in a larger range between the 0.79 level underneath, and the 0.81 level above. The 0.80 level of course is basically in the middle of all of this and could be thought of as essentially “fair value.”
Risk Appetite
Risk appetite has a major factor here, and quite frankly the happier traders are in general, the more likely we are to see some type of bounce. As things stand right now, this is a market that will continue to be one that you have to pay close attention to, because the US dollar will strengthen against most currencies if there is a general “risk off” attitude to the market, but the Swiss franc is different. If we start to see a lot of risk appetite get destroyed in the markets, the Swiss franc will continue to strengthen.
As things stand right now, it looks like this market is just simply trying to figure out whether or not it can find a bottom. If we start to fall rapidly, the Swiss National Bank will have something to say, as they tend to get aggressive when the Swiss franc appreciates too quickly. It’s worth noting that the interest rate differential favors the US dollar, so you do get paid to wait if you are so inclined to hang on to a long position.
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