- The U.S. dollar gained modestly against the Swiss franc on Monday, showing stability above 0.80.
- I see signs of a potential base forming, with resistance near 0.8150 and upside targets toward 0.8218 and possibly 0.85.
The U.S. dollar has rallied a little bit against the Swiss franc to show signs of stability and positivity in this currency pair on Monday. The 0.81 level continues to be important, and I think it is a level that you have to look very closely. Because of this, I think you’ve got a situation where the market is watching the 50-day EMA near the 0.80 level for support, especially as we are in the midst of potentially building a basing pattern for a longer-term move.
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Short-Term Barrier
The 0.8150 level is potentially a short-term barrier, but once we break above there, it’s likely that we will see this market really take off to the upside. In that environment, you could see the market go looking to the 200-day EMA, which is at the 0.8218 level. Anything above there then is most certainly a positive sign, and you would see the U.S. dollar swallow the Swiss franc whole. I would anticipate a move to the 0.85 level.
This pair does pay you at the end of every day to hold on to it if you’re long, as the interest rate differential most certainly favors the United States. That being said, both of these are considered to be safety assets, so it does tend to move a little slower than most others.
Typically speaking, if the U.S. dollar is starting to strengthen against everything, and unless it’s a panic, it will rally against the Swiss franc, but it’ll do so in a slower manner. It facilitates a lot of back-and-forth trading on daily charts, but the pair also facilitates really nice swing trading opportunities, which I’m seeing now.
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