The US dollar has dropped slightly against the Swiss franc on Thursday, as we continue to see a lot of questions about whether the interest rates, or a “safety” trade, will take over.
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USD/CHF
The US dollar has drifted a bit lower against the Swiss franc during the early part of the trading session on Thursday, with the 0.81 level offering a bit of a short-term barrier. At this point in time, I think we've got a market that is still trying to build up the necessary momentum to break out to the upside, and you could make an argument for a little bit of a bullish flag, but the 0.80 level underneath, I think, continues to offer support.
The 50-day EMA breaking above the 200-day EMA opens up the possibility of a longer-term buy-and-hold scenario if you believe in the golden cross. The interest rate differential continues to favor the United States dollar, and of course, the Swiss National Bank has no interest whatsoever in trying to make the Swiss franc appreciate too quickly.
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So with that being said, I believe this is a market that you buy the dips, and you try to take advantage of value, and with this, I believe that traders will be looking at this as an opportunity every time we get a little bit of value and a little bit of US dollar weakness, and I have no interest in shorting.
I believe, given enough time, we will probably go looking at the 0.85 level above, but it will take a certain amount of time to get there. With this, I believe we continue to see a lot of volatility, but I think given enough time, we should be able to buy and hold this, as you get paid to hang on to the currency pair for some time.
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