USD/CHF
The US dollar has been consolidating against the Swiss franc in a major rising wedge over the last several months. You can see that I have this shape drawn out with red trendlines on the chart, and I think at this point we are more than likely to test the uptrend line given a bit of time. I think that the parity level is starting to become a bit too much for the buyers, and if we break down below the uptrend line, then the market will unwind. Keep in mind that the USD/CHF pair is essentially the opposite of the EUR/USD pair, so if we get a breakout in the EUR/USD pair above the 1.15 level, that means that this pair will probably fall rather significantly.
It should also be noted that we have the Federal Reserve looking to soften its stance, and I think that will continue to weigh upon the US dollar in general. This is a market that a lot of traders will overlook, but it’s at their own peril. While there is a lot of noise in the EUR/USD pair, the USD/CHF pair tends to be a little easier to handle at times. Because of this, I will be paying close attention to the 1.0000 level, and as long as we stay underneath that I think that we are more than likely going to continue to see selling come back in. If we do break down below the uptrend line, and perhaps even the 0.9750 level, then I think that we will probably go looking towards the 0.95 level given enough time. A break out to the upside is possible, but it would probably be completely reliant on the Federal Reserve becoming a bit more hawkish, which is something that they seem to be stepping away from.
