- Interesting setup here because the US dollar has plunged a bit against the Swiss franc during the trading session on Wednesday but has popped back up above the 200 day EMA.
- So, I have to ask questions here. Will the whole bank turn around?
- I do see that the US dollar's getting hammered against almost everything out there, but let's be honest, this is a Swiss franc.
- So, with that, I think you need to look at this in its own light, not necessarily US dollar down everywhere. If we can break above the top of the candle sec, there is the possibility that we get a bit of a bounce towards the 0.90 level.
On the Other Hand
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On the other hand, though, if we were to break down below the bottom of the candlestick, then I think at that point, we're well below the 200 day EMA. We've even reiterated the ugliness of the trend. And at that point, I would expect the US dollar to start falling. That being said, I do recognize that the interest rate differential is still very strongly in favor of the US dollar, despite the fact that we have seen the bond markets just tear apart interest rates in America.
All things being equal though, I do think that the markets are trying to price in a lot of interest rate cuts in America that might be a little overdone. We'll just have to wait and see. But one thing is for sure, Switzerland will have very tiny interest rates, and it would take a significant move by the Americans to make those things somewhat equalized. So, I do watch the upside. If I see the US dollar falling here, I would rather short the dollar against a stronger currency than the frank, but this is a good indicator chart, if nothing else.
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