The U.S. dollar has rallied quite nicely against the Swiss franc for some time now and Tuesday was no different.
It looks like the 0.8350 level has offered a bit of hesitation, perhaps minor resistance.
This is an area that has some psychology attached to it, but at this point in time, it is simple gravity that could be a problem.
I think at this point in time, though, it's obvious that the interest rate differential continues to favor the U.S. dollar and probably will for the foreseeable future. The Swiss National Bank is happy with the zero interest rate policy, while the United States finds itself in a situation where inflationary headwinds are coming not only from the energy sector, but also from overall borrowing costs rising and the insatiable thirst of the U.S. consumer. It all ties together for a higher rate for the dollar.
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Pullbacks offer plenty of opportunities
I do believe that there is a significant support level near the 0.82 level. That was a previous swing high, and this is a pair that I've been long of for quite some time. I get paid at the end of every day, and that builds up over time.
I have no interest in shorting the USD/CHF pair. I do think eventually it goes much higher, but again, I think we're a little stretched. We have just formed two bullish flags. We haven't quite formed the complete realization of the measured move of the second bullish flag, but we're pretty close.
I think ultimately pullbacks are buying opportunities. The U.S. dollar continues to be a currency that you want to own, especially against the franc. I remain bullish and still hold this position.
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