- On Monday, we saw the US dollar gap lower against the Swiss franc, only to turn around and fill the gap.
- However, there has been a significant amount of resistance coming back into the market, dropping the pair back toward the 0.79 level.
- The 0.79 level is a large, round, psychologically significant figure that has attracted quite a bit of attention multiple times recently, and I think it will continue to act a little bit like a “floor in the market.”
Technical Analysis
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The technical analysis for this market is relatively flat, but it is worth noting that this is an area that looks a lot like a “floor in the market”, and it’s probably also worth noting that this pair will quite often find itself being very choppy and taking its time to turn things around. After all, this is a pair that is typically slow-moving anyway.
Both currencies are considered to be “safe currencies”, and therefore they tend to act in similar manners. That being said, if we see the US dollar lose strength in multiple places, then the Swiss franc probably won’t be any different. Ultimately, this is a pair that I think is trying to find a way to bounce, but we just don’t have the momentum yet, and that will be the big sticking point. If we were to break down below the 0.78 level, that could open up the “trapdoor” at lower levels, but right now I don’t think that is a huge concern. While it does look negative, ultimately, I think this is a situation where the market is just simply bump along the bottom in trying to find a reason to turn things around. That’s somewhat like the rest of the US dollar markets right now, and I think the Swiss franc will be any different. On a break above the high of the trading session on Monday, I’m probably going to be a buyer again.
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