The past week of trading has essentially wiped away the notion that the USD/CHF was about to re-establish its bearish trend. In fact, the last couple of days of trading have brought the USD/CHF to within sight of long-term resistance values not seen since last July. As of this morning, the Forex pair is still traversing near high water marks and traders who want defy its trend and look for downside price action will need plenty of fortitude.
The USD has been stronger against many currencies including the Swiss franc. Forex has proven volatile the past month as the US Treasury market undergoes a change in sentiment as financial houses ponder the impact of higher yields from US bonds. The USD/CHF has certainly felt the effect of these gyrations and technical traders have been challenged with a difficult landscape.
The current value of the USD/CHF has the Forex pair flirting with long-term resistance values of 0.94400 which were seen in July 2020. While some speculators may believe this resistance level will prevail and cause a reversal lower, technically the USD/CHF has proven it has the ability to brush aside resistance fairly easily the past few weeks.
However, short-term speculators with courage may believe the rise of the USD/CHF is due for a natural reversal lower and this may be proven correct. In order to take advantage of this thinking, a trader will need to use limit orders and have patience. Traders also must consider the fact that Forex trading will be quite limited after Thursday due to the Good Friday holiday taking place. This notion may cause additional volatility to occur as financial houses position themselves for the holiday weekend.
The USD/CHF was trading near 0.92220 only a week-and-a-half ago. Early in March, the USD/CHF was trading below the 0.92000 value. What changed? Since the 18th of February, there has been an incremental rebound higher by the USD/CHF and this is likely a direct reflection of the investment environment initiating a fundamental shift within major currency pairs as the massive stimulus packages in the US are undertaken and digested. Technically, the USD/CHF now looks like it has the ability to challenge long-term resistance.
Until proven otherwise, speculators may want to buy the USD/CHF and look for tests of resistance levels near 0.94400. If this juncture proves to be fragile, the value band of the USD/CHF could then touch prices seen in June of 2020 when values went as high as approximately 0.95200.
Swiss Franc Short-Term Outlook:
Current Resistance: 0.94400
Current Support: 0.93900
High Target: 0.94700
Low Target: 0.93500
