The US dollar has dropped a bit against the Swiss franc on Monday, as rates dropped in America. This was in reaction to the potential signing on Friday between the USA and Iran.
USD/CHF
The US dollar has fallen against the Swiss franc as we are starting to see a bit of risk appetite coming back into the market due to the idea that the Americans and the Iranians may come to some type of extended agreement. Friday, we are supposed to see a signing of a framework between the Iranians and the Americans to at least settle things down for a couple of months while we try to find a lasting peace.
Quite frankly, I do believe that eventually this market turns around, though, because the US dollar is considered to be a riskier currency than the Swiss franc over the longer term. Furthermore, you have the interest rate differential favoring the US dollar, and I think that comes into the picture as well because, quite frankly, you get paid to hang on to this pair to the upside.
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Interest Rate Differentials and Technical Levels
The 200-day EMA has been violated, but if we can break back above the 200-day EMA, we could see this market go look into the 0.8050 level and then possibly even the 0.81 level.
In the short term, the 0.79 level is an area that I think a lot of people will be watching for potential support, as well as the 50-day EMA, which sits just below there. This is an area that I think will be important to traders who believe in the longer-term move to the upside.
With that being the case, I like the idea of taking advantage of any type of momentum to the upside, as I do believe it is probably only a matter of time before we see some type of run back to the US
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