On Tuesday, the US dollar was stronger against the Swiss franc, which makes sense since the interest rate differential continues to favor America over Switzerland.
USD/CHF
During the session on Tuesday, we've seen the US dollar rally against the Swiss franc again, which makes sense considering that interest rates are rising in America. All things being equal, this is a market that's been in an uptrend until recently, and right now, it seems as if we are consolidating right around the 0.81 level.
The 0.81 level is a large, round, psychologically significant figure that has had a lot of interest paid to it, and I think that continues to be the case. Short-term dips, in my opinion, are buying opportunities with the 50-day EMA reaching the 0.80 level. The 0.80 level, of course, is an even bigger round figure that a lot of people will be watching, and we recently got the Golden Cross, which, of course, is a long-term bullish signal for a lot of people.
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With that being the case, I do think that we are starting to see mounting pressure for a breakout to the upside. The upside being broken is what I would anticipate eventually, but the real signal will be once we get above the 0.82 level because it opens up the possibility of a run all the way to the 0.85 level. The 0.85 level, of course, is a massive, large number on longer-term charts, and this will continue to have people looking at the market through a buy-on-the-dip attitude, as we have seen so much in the way of upward trajectory.
USD/CHF is a pair that typically is somewhat quiet, and in this environment, it doesn't surprise me at all to see that we are grinding higher, not necessarily breaking to the upside. But I also recognize that traders are looking at this as a market that remains very quiet, one that remains very stable, and one that I think offers plenty of buying opportunities every time it dips.
I've been adding to a longer-term position for a while in small increments, and that is turning into quite the investment. I would not be interested in shorting this pair, but I'd be the first to recognize that if we were to break down below the 200-day EMA near the 0.7978 level, then it could change attitudes.
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