We had a pretty strange day in the Forex markets, as we learned over the weekend that Greek banks were being closed in order to prevent a run as liquidity was going to be a serious issue. Because of that, everything ran away from the European Union and the continent in general. With that being the case, the Swiss franc was probably unfairly punished in most markets. This was most certainly one of them.
Looking at this chart, you can tell we are most obviously in an uptrend, and I believe that is going to continue. The fact that we not only fill the gap but continue to go higher than where the gap started tells me that the market is probably quite a bit stronger than most people realize, and as a result I am buying pullbacks from time to time as they should represent value. I think that it’s only a matter of time before we head towards the 134.60 level again, so quite frankly I’m willing to not only buy pullbacks but willing to hang onto them for a while.
Follow the longer-term money
Sometimes it is just easier to follow the trend. This is most certainly one of those times and I think it would be foolish to try to fight it based upon headlines coming out of the Mediterranean country. Yes, I know that the Greek banks are the big fear for most people in the world but the difference in this pair is that they are both safety currencies. In other words, I don’t see there being suddenly a fear of owning the Swiss franc as opposed to the Japanese yen. Having said that, this might actually be one of the better ways to play a potential workarounds in Greece. After all, this is essentially putting Europe against Asia, and right now we would have to think that Europe is getting a little bit stronger, because the markets may actually be pricing in the possibility of the Greeks leaving, which would actually be a good thing in the end. Either way, to keep it simple just follow the trend.
