The US dollar has drifted a bit lower against the Swiss franc on Monday, but at this point, we are a bit overextended in this pair.
USD/CHF
The US dollar has drifted a bit lower against the Swiss franc during trading here on Monday, as we continue to see a lot of noisy action in general. All things being equal, the US dollar should continue to rise over the longer term against the Swiss franc if you look at the interest rate differential.
Furthermore, you have to ask questions as to whether or not the US dollar can continue to strengthen. Ultimately, I think this is a situation where we will continue to see a lot of people taking advantage of the interest rate differential, and I also recognize that the 0.80 level will be an area that a lot of people watch for a potential floor.
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Interest Rate Differentials and Technical Formations
The 50-day EMA is starting to turn higher, perhaps getting ready to break above the 200-day EMA, which opens up the idea of a so-called Golden Cross, and that allows for technical traders to look at it through the prism of an uptrend.
The market, I believe at least, could go looking toward the 0.84 level, but you have to be very cautious and perhaps be patient. Over the longer term, I do think that we have seen the bottom in this pair, and we have just recently broken above the top of a massive ascending triangle.
The measured move for that is roughly 0.84, and as a result, I am trying to hold on to this long enough to reach that level. Whether or not I actually get that remains to be seen, but as long as we are above the 0.80 level, I do believe that the upside is the correct side here.
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