If we can bounce from here, I will be looking to buy the US dollar against the Franc.
USD/CHF
The US dollar has fallen pretty significantly against the Swiss franc and my email box is full today of people asking me why that is because supposedly we are getting closer to peace than we had been previously.
So therefore, most traders are looking for the Swiss franc to strengthen based in times of concern, not times of risk appetite coming back, but this comes down to the bond market. The 4.30% level in the 10-year yield for me is a very important level in the United States and as we fell through that, you saw the US dollar sell off. Now we've seen that recaptured and now we're just kind of hanging around that level and I think that will be your guide for a lot of things US dollar related.
Interest Rate Differentials and Technical Barriers
So I think you have a situation where traders are going to be looking at this through the prism of the interest rate differential and it is still going to show quite a bit of carry trade possibilities here and I think you are looking to take advantage of the jump or perhaps the fact that we have a little bit of value here.
It's worth noting that the 0.79 level is an area that previously had been supported. If we can bounce from here, I think this is a very interesting and intriguing setup and I won't hesitate to do so as far as going long.
The 200-day EMA offered resistance at the crucial 0.80 level. That's a technical barrier that I think you have to keep in mind, but if we can break above the high of the Tuesday session, that would be a very strong positive sign for the dollar. To the downside, the 50-day EMA and the 0.78 are your next couple of support levels.