- The 0.79 level is an area that we’ve been watching for a while here, and it’s acted like a basement, for the market.
USD/CHF
The US dollar has been very noisy during the session here on Monday against the Swiss Franc, and I find this price action very interesting. The 0.79 level is an area that we’ve been watching for a while here, and it’s acted like a basement, for the market. I think that makes quite a bit of sense because there are a couple of different things going on here.
Keep in mind that the pair is the opposite of the Euro against the US dollar, basically. And over there, it looks like the 1.18 level just can’t be broken. With that, you would expect the opposite here, and that’s exactly what you’re getting. It won’t break down.
Swiss National Bank
But we also have the Swiss National Bank out there ready to intervene if the Swiss Franc strengthens too much, although their preferred measuring stick is against the Euro. With that being said, and the fact that it’s the holidays, it makes perfect sense that we would have a scenario where the market really isn’t doing much and certainly does not have the momentum to truly break things down. If it does break down too quickly, I would fully anticipate the Swiss National Bank intervening.
Top Regulated Brokers
If we can break out above the 0.7950 level, I think it might be worth a short-term long position, which would just be a repeat of everything that we’ve seen since July. Ultimately, a lot of this will come to risk appetite being reasonable, as the Swiss Franc is considered to be a safer currency than the US dollar. I don’t really understand that as a major driver, mainly due to the fact that both are considered safe haven assets, but it’s further out on the risk spectrum, so it does tend to hold true.
Ultimately, I am bullish but mildly so. I think we have some work to do in the US dollar before it starts to strengthen longer term, but this has been a fairly predictable range, and that’s why I’m pointing it out to you.
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