The US dollar rallied against the Swiss franc again on Thursday as we continue to see a lot of carry traders out there in the FX markets.
The US dollar rallied against the Swiss franc again during trading on Thursday, as we are above the crucial 0.80 level. This is a pair that I have enjoyed for some time, as range-bound trading and getting paid for holding the US dollar. All things being equal, this is a market that I think every time it pulls back, you have to look at it as a potential value play with the 0.79 level being a potential floor in the market.
Keep in mind that the Swiss National Bank, of course, is still out there fighting the Swiss franc strength, and therefore, I think if it does start to break down significantly, perhaps below the 0.78 level, that might be enough to get the Swiss to act and work against Swiss franc strength.
A Major Change in Attitude
The 0.8150 level is right about where the 200-day EMA is, so if we were to break above that, that would be a major change in attitude for this pair, and that could send this pair much higher. At that point, I'd be looking at a move to 0.85 or so.
Ultimately, I don't have any interest in shorting this pair, although you've been okay doing so at the top of the range, but I tend to look at this as a potential bottoming pattern for a multitude of reasons. As a result, what I'm hoping for, quite frankly, is to wake up in the morning someday and to have broken out of this range and holding onto a long position.
Remember, sometimes the best trades are the ones that you're not involved in right away, the ones that you are just sleeping through, or you get the confirmation later. At this point, I think we've got a scenario where eventually the US dollar takes off against the Swiss franc because it has been so resilient against everything else. At this juncture, I am only buying this pair just as I have since the autumn of last year.
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