USD/CHF Forecast: Continues to Consolidate Gains After Move Against Franc

• The USD/CHF has pulled back a bit during the trading session on Wednesday, as the 200-Day EMA sits just above.
• This indicator will obviously attract a lot of attention, and when you look at the longer-term charts it’s clear that the 200-Day EMA is widely followed in this pair.
• The Swiss franc tends to move very slowly, but it does look at this point like we are trying to break out to the upside.

If we do clear the 200-Day EMA it’s possible that we could break above the 0.95 level, opening up the possibility of a move all the way back to the 0.98 level. The market continues to see a lot of volatility, but I do think that the US dollar is doing everything it can to break out against multiple currencies. The Swiss franc of course is going to suffer the same type of fate that the Euro well, as the 2 economies of Switzerland and the European Union are so highly intertwined. Remember, Switzerland since about 85% of its exports into the EU, so the 2 economies have a massive influence on each other.

I’m Bullish

When I look at this chart, the 50-Day EMA sits near the 0.93 level underneath, which should offer significant support. If we were to break down below there, then it would kill the upward momentum. However, we have made a huge “rounding bottom”, and it suggests that the market is trying to turn things around from a longer-term standpoint. I do believe that eventually, the US dollar does take off against the Swiss franc as well as many other currencies, especially if interest rates continue to rise in America. That being the case, I am a buyer of this market on a breakout, or a pullback toward the 50-Day EMA, as long as we can stay above that level.

It’s also worth noting that the 0.92 area underneath offered support this time, but it also offered support multiple other times in the past. You can also say that the 1.01 level above offers a significant resistance barrier, as it has proven to be the top of a multi-year range. At this juncture, it looks like we are going to go higher given enough time so I am bullish and just assume that the market will continue to do what it’s done for quite some time.