- The USD/CHF has fallen slightly during the trading session on Monday but continues to find support near the 0.92 level.
- Keep in mind that the market is likely to continue to be very choppy and noisy, especially considering that there is a serious lack of liquidity.
- In that scenario, it does make quite a bit of sense that we would have to make moves with a bit of a grain of salt.
That being said, if we break down below the 0.92 level, that could open up a bigger move, maybe down to the 0.90 level. That’s obviously a large, round, psychologically significant figure, and would attract a lot of people into the markets. I think that this week will be rather quiet, setting up the likelihood of a more sideways week, as we are waiting for the jobs number on Friday in the United States. Furthermore, we are in an area that has historically seen a lot of noise, so I would anticipate more of the same.
Downward Pressure Ahead
If we can break above the 0.93 level, it’s possible that we could continue to build off the pressure necessary to turn things around. You can still make out a bit of a “falling wedge” in this pair, suggesting that perhaps the market could recover toward the 200-Day EMA, which is just above the 0.95 level at the moment. In that area, I would expect to see quite a bit of downward pressure, but if we were to break above there, then it’s likely that the US dollar could try to get all the way back to parity against the Swiss franc. I don’t think that it’s going to be easy to make that happen, but it is a possibility over the longer term.
If we were to turn on a breakdown below the 0.90 level, then it’s very possible that we could see quite a downward move, but I’m not necessarily counting on that at the moment. I think we’ve got a situation where we are probably going to bounce around in this area before making and more impulsive move. I don’t know when that is, but I also recognize that it probably won’t be in the next couple of sessions. If you are a short-term range-bound trader, you may like this pair between now and Friday.
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