Buying dips in this pair continues to be the way forward longer-term.
USD/CHF
The US dollar did fall a bit in the early hours here on Tuesday but then turned around to show signs of life as the 50-day EMA has offered support. Ultimately even if we break down from here, the 0.78 level is an area that previously had been resistance and possible support on any pullback. Keep in mind that the Swiss National Bank is willing to come into the picture to the markets to intervene if markets get a little too one-sided.
With this, I think you have to look at the US dollar as the preferable currency. Further, you have to keep in mind that interest rates in America did rise pretty significantly during the day so that has helped. If that continues to be the case, then I do think that the US dollar will find plenty of strength against the franc. Eventually, I believe this market probably tries to find the 0.80 level above as a potential target, but I also recognize that we have a lot of noise ahead of us.
The Role of Market Memory
If we pull back, the 0.78 level should be pretty solid barring some type of news. It's an area that previously had been resistance in a pretty significant ascending triangle that people had been watching, so there is a lot of market memory there that I think gets involved.
Buying dips and just simply holding on longer term is my overall plan, but I do recognize the markets are also moving on headlines coming out of the Middle East and the random nonsense that leaders will speak from time to time. In that environment, it's very difficult to have a big position. Quite frankly, that's part of what I'm doing is just playing the carry trade with smaller positions and getting a little bit of a bump every day in order to eventually take advantage of what I think will be the longer-term move.