- The USD/CHF has been all over the place during the Friday session, as we have seen a lot of noisy behavior.
- The 0.94 level is an area that we have seen a lot of noise in the past, so does make a certain amount of sense that we would see the market try to hang on in this area.
- The fact that we ended up forming a neutral candlestick also suggests that perhaps there’s a little bit of hope.
Keep in mind that the market dealt with the jobs number during the trading session on Friday, which of course has a lot to do with what the Federal Reserve might do, and the fact that the United States has offered a stronger-than-expected number certainly does not help the situation as well. With this being the case, it’s causing more chaos than anything else. The market now ending up forming a bit of a neutral candlestick sets up a bit of binary trade.
Noise Ahead
If we can break above the top of the candlestick, then it would be bullish, perhaps sending the US dollar to the 0.96 CHF level. The 200-Day EMA is sitting just above there, so it’ll be interesting to see whether we can break above it. If we do break above there, then it’s likely that we would see the US dollar try to get back to the parity level, completing the overall consolidation.
However, it is worth noting that we have seen a lot of resistance to a rising greenback, so a breakdown below the bottom of the candlestick opens selling pressure that is probably easier to deal with. It broke down below the bottom of the candlestick opening the idea of a move down to the 0.92 CHF level, and then possibly even down to the 0.90 level. This would obviously be the beginning of something rather ugly for the US dollar, not only here but against other currencies as well. With, the market is likely to continue to be noisy, but overall, I think that we’ve got a situation where the US dollar is going to move in one direction regardless of the currency pair, as everybody is focusing on the Federal Reserve and Jerome Powell.
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