The US dollar has been back and forth against the Swiss franc, as the markets are paying close attention to the
USD/CHF
The US dollar has been very noisy against the Swiss Franc during trading on Tuesday as we continue to hang around the 0.78 level. The 0.79 level above is a resistance barrier that people are watching very closely, but between here and there we also have the 50-day EMA.
The US 10-year yield continues to be higher than expected or comfortably dealt with by traders, but it did drift a little bit lower during the session and that has caused a little bit of easing of US dollar strength.
Interest Rate Differentials and Global Caution
Nonetheless, this is a market that continues to see a buy on the dip type of opportunity for traders who are willing to take advantage of the significant interest rate differential between the two countries.
The Swiss National Bank continues to work against the value of the Swiss Franc and interest rates and will not hesitate to get involved in order to drive the value of the franc down. The US dollar of course has been getting strong mainly due to the fact that there has been so much in the way of concern around the world when it comes to the Middle East and of course other things around the world that continue to have people very cautious.
Ultimately, this is a market that I do think tries to get its way back to the 0.79 level, but it doesn't mean that it will be easy. The best part about this though is that you get paid to hang on to this pair and simply wait. With that being the case, I like this pair to the upside but I also recognize that it's more of a grind than anything.