The USD/CHF pair initially fell during the course of the day on Wednesday, but as you can see there was plenty of support at the 0.99 handle in order to turn things back around and form a hammer. That hammer of course is a very bullish sign, especially considering that it is at the top of a move higher. However, the one thing that we have to keep in mind is that the parity level above continues to be important as it is a large, psychologically significant round number.
Because of this, it’s only a matter time before we break out you also have to keep in mind that it will cause a little bit of volatility. Pullbacks at this point in time should find plenty of support, especially as we have seen the 0.98 level as massively supportive. The 0.98 level was significantly resistive previously, and as a result it should now be support going forward. The fact that we bounced from there of course makes a lot of sense.
Swiss National Bank
The Swiss National Bank has been working against the value of the Swiss franc in general for a while now, even though it has been a bit clandestine. Recently, it had released financial statements suggesting that it has been working against the value of the currency specifically against the Euro, but more often than not they will cycle through various pairs. Ultimately, the US dollar should continue to strengthen against the Swiss franc, mainly because of the European Union. What I mean by this is that the Swiss of course are beholden to what goes on in the European Union as the 2 economies are so intertwined. As both the Swiss franc in the US dollar are considered to be safety currencies, it makes more sense that the traders around the world feel more comfortable owning the US dollar as it is on the other side of the Atlantic from Europe.
