- During the session on Thursday, we have seen the US dollar rally a bit, against most currencies around the world.
- However, after Pres. Donald Trump mentioned that the Chinese may see tariffs to drop a bit, and keeping in mind that the Chinese and the Americans are meeting over the weekend, we have seen the US dollar search.
- The US dollar has been punished for the trade war, but this trade war looks as if it has run its course as far as fear is concerned, at least at the moment.
Darkest Before Dawn
Top Forex Brokers
There’s an expression in English that goes “It is always darkest before dawn.” In other words, things always look the worst right before they turn around. There has been a lot of teenage-like drama in the financial markets, and it is probably worth noting that every crisis that I’ve seen before has the usual pundits coming out and talking about the end of the world, generally about 10 minutes before everything changes. I do believe this is another one of those situations, and it would not surprise me at all if we had seen the bottom in this pair.
This isn’t to say that it cannot go lower, just that the Swiss franc is considered to be a safety currency, and ultimately so is the US dollar. However, if the problem is risk appetite, generally speaking, traders will choose the Swiss franc out of the 2. Furthermore, there’s also a specific reason why they are shorting the US dollar, and if that reason goes away, then you start to talk about interest rate differential which greatly favors the greenback.
If we can break above the 0.8350 level, then I think we could see a move toward the 0.85 level. If we cannot, that means we are just going to spin our wheels here and consolidate between the 0.82 level and the 0.83 level. Keep in mind that the US/China delegates meet over the weekend, so that could be the cause for the next major mover.
Ready to trade our daily forex forecast? Here are the best online trading platforms in Switzerland to choose from.