The USD/CHF currency pair has rallied a bit during the relatively quiet trading session on Tuesday. Jerome Powell had a speech in which she reiterated everything that the Federal Reserve is been saying, so it wasn’t very shocking. At this point, the market will continue to be very noisy, but I do think that it is probably only a matter of time before we see some type of clarity. Ultimately, the US dollar is very well supported just below, but we have a couple of things we need to get through first in order to send this market in one direction or the other.
USD/CHF Today's Technical Outlook
- On the upside, the 0.94 level almost certainly offers a significant resistance barrier, and it is probably worth noting that the 50-Day EMA hangs around in the same area.
- Because of this, it’s very likely that we will find buyers given enough time, but whether or not we can break through there is a completely different story altogether.
- I think if we do break above the 50-Day EMA, that could be a very bullish sign for the dollar against the Swiss franc, which would probably be in the vein of a huge US dollar rally around the world.
- In that scenario, we have the likelihood of not only the Swiss franc losing ground against the US dollar, but other currency such as the Euro and the British pound.
On the other hand, if we start to see the US dollar break down rather significantly, it should do so here as well. However, it’s worth noting that there is a lot of noise just below that extends down to the 0.90 level, so therefore it’s worth recognizing that we may get a little bit of a bounce along the way. It is because we are so close to major support that I am not willing to short this market, at least not in this environment. I recognize that we are in an environment that is jittery to say the least, so I’m a bit cautious about position sizing. As things stand right now, we have been consolidating and it’s likely that we will see more of the same over the next couple of days until we get inflation data from which the market can extrapolate its next move.
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