The US dollar has shot higher against the Swiss franc, as the speech by Kevin Warsh has reiterated the idea of a hawkish Federal Reserve, and the interest rate situation will still be strong against many currencies, including the Franc.
USD/CHF
The US dollar has initially fallen against the Swiss franc, only to turn around and show signs of extreme strength, breaking above the 50-day EMA. The 0.81 level has been slammed into, and now the question is going to be whether or not we can break above there.
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The massive selloff that we had seen the pair much lower as the carry trade was crushed by intervention in the yen, but we've just about swallowed that candlestick. In general, this is a market that I think if we can break above the 0.8150 level, then the market could go looking to the 0.82 level.
Technical Analysis
Short-term pullbacks open up the possibility of buying a dip, and it's worth noting that I have been bullish of this market for some time. I've been long of this market for some time and continue to add after the bounce.
The bounce was at the 61.8% Fibonacci retracement level, and it now looks as if we are going to continue to see a lot of technical trading in this USD/CHF pair. But it's also worth noting that the Swiss National Bank is choosing to hang on to the 0% interest rate policy. And with Kevin Warsh sounding much more hawkish than the market thought, that makes a lot of sense that this pair could continue to go to the upside, perhaps eventually hitting the 0.82 level.
Ultimately, this is a market that I think with the increased momentum on Friday, then we could see how this opens up on Monday. I do think that the longer-term trend is still trying to reassert itself to be bullish.
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