- The US dollar has fallen against the Swiss franc on Thursday, as the markets continue to weigh whether or not the SNB will intervene.
The US dollar has fallen against the Swiss franc again during the trading session on Thursday as traders continue to see a fairly obvious range play out. All things being equal, though, I think this is a market that will continue to see buyers come in and try to join the Swiss National Bank in defending the US dollar against the franc and other currencies as well.
After all, this is a market that has already seen the Swiss National Bank come straight out and acknowledge that they are, in fact, watching the Forex markets for unacceptable moves. The Swiss National Bank is known to intervene in the market when things get out of control, and I do believe that would be the case if we broke too significantly below the 0.79 level.
Having said that, it’s also worth noting that the Swiss typically pay more attention to the Euro against the Swiss franc, but it does have a knock-on effect all the way throughout the FX markets.
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50-Day EMA Resistance
To the upside, it’s obvious that the 50-day EMA has offered a certain amount of resistance, and I think it will be thought of as a short-term ceiling. If we can break above the 50-day EMA, then it opens up a move to the 0.80 level, which is a large, round, psychologically significant figure. And then above there, we could be talking about the 0.81 level.
I think the 0.81 level being broken to the upside would be a bit difficult, but overall, this is a market that will eventually try to find a way to get there one way or the other.
If we were to break down significantly below the 0.79 level, I’d be willing to take the loss and exit the trade, understanding that it is probably only a matter of time before things rocket to the upside again. We have been grinding sideways for a while, and collecting profit at the end of every day via swap has been how I’ve approached this market. It’s just a simple range-bound trade, and I do think it continues.
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