The US dollar continues to see a lot of support in this region, as the 50 Day EMA and other factors are coming into the equation.
USD/CHF
The US dollar initially pulled back just a bit during the trading session here on Tuesday, breaking below the 0.81 level and then finding buyers. Ultimately, the interest rate differential is going to continue to see US dollar positivity. This is fading a little bit in the last few days, but at the same time, this is a market that continues to pay people to hold onto the long side.
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The 0.80 level is an area that I think a lot of people will be watching very closely, especially with the 200-day EMA coming toward it. If the market were to break above the 0.82 level, it would be a huge victory for this market, and that would show a significant amount of momentum coming into the market.
Interest Rates Drop in America
The US 10-year yield has dropped a bit during the session, so that explains some of the upward momentum being squashed. But over the longer term, the interest rate situation is still one that sees the Swiss offering almost nothing, and the Swiss national bank likely to keep the market somewhat soft for the franc and keep interest rates near zero. They have no interest in strengthening the Swiss franc.
So, the Swiss are happy with this. The 50-day EMA offering a bit of support is strong. And if we can break above the 0.82 level, then I think you could be looking at the 0.85 level given enough time. Ultimately, this is a market I like buying dips in. I have no interest in selling this USD/CHF pair, and I just don’t see a situation where that would make sense.
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