- The Tuesday session has been very ugly for the US dollar across the board, and that would not have been any different in the Swiss franc.
- That being said, I think this is a market that you need to recognize that we are testing the 200-day EMA, so it'll be interesting to see if this can bounce.
- When you look at the longer-term charts, though, you can make a serious argument that we just tested the top of the overall range.
There is a lot going on right now. And while the U S dollar is struggling, it's not the Swiss franc I want to own. After all, the Swiss national bank is very dovish and recently cut rates quite aggressively, cutting 50 basis points at the same, at the same meeting.
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Watch the Market Before Jumping In
So, at this point, we'll have to watch how this plays out. If this USD/CHF pair starts to bounce from here, it might be an interesting buying opportunity. But really at this point in time, I think you would need to see the market take out the 0.90 level to the upside. If that happens, then I think there is a real shot at this pair going to the 0.92 level. If we break down below the bottom of the candlestick for the day, then 0.8750 is your next target. And then after that, the bottom completely falls out. And I think we will go back down to the 0.84 level.
The markets are trying to price in the idea of three interest rate cuts this year. I think that's a bit much, but this is a sudden shift. So, it'll be interesting to see how this plays out. The Atlanta Fed has suggested that we are going into something akin to the Great Depression. And again, people look at that as gospel, multiple times in the past where the Atlanta Fed was completely wrong. So with that being said, in the short term, it looks very negative US dollar, but turning around and taking a handle to the upside, I think would be a very pro US dollar signal. And we would probably see the dollar rising against everything.
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