- USD/CHF attempted to rally but faded near 0.81 resistance as momentum indicators rolled over, suggesting a potential pullback toward 0.80 or 0.79.
- Despite this, the broader outlook remains bullish, with key levels and holiday-thinned trading shaping the near-term setup.
The US dollar initially tried to rally against the Swiss franc, but it started to roll over a bit later in the day, and this makes a little bit of sense because we are still in the midst of trying to form a bottoming pattern. The stochastic oscillator is rolling over right at the overbought level.
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Which happens to be right where the resistance is in the form of 0.81. As we drop from here, I think it opens up the possibility of a move down to the 0.80 level, maybe even the 0.79 level. Now, having said this, I am still bullish on this pair, and I think a short-term pullback opens up the possibility of buying quite a bit of value.
The 0.79 level is a major floor in the market. And I think the 0.79 level being broken to the downside might actually catch the interest of the Swiss National Bank. They have stated quite publicly that they do not like the idea of the Swiss franc strengthening drastically. If the market were to turn around and break above the 0.8150 level,
The day EMA comes into the picture to offer resistance and clearing that of course sends this pair much higher. Over the last couple of days, we have seen the market trying to argue for more rate cuts coming out of the Federal Reserve, but, and this is a big if in the market, they don't cut as aggressively as the market once thought. We've seen the US dollar just take off because of that.
In short, I believe this is going to end up being a buying opportunity. I'm just going to step back for a day or two. We have Thanksgiving in the United States, and Friday will still be a little thin. I'm going to watch what happens. If we drop in and bounce, I'm willing to buy it because, after all, you get paid at the end of every day to hold this pair.
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