The U.S. dollar continues to see a bit of resilience against the Swiss franc, as we have seen a nice bounce against the franc after an initial selloff on Thursday. With this, the interest rate differential continues to play out in the dollar’s favor.
USD/CHF
The U.S. dollar initially fell against the Swiss franc during trading on Thursday but has since bounced a bit to show signs of life.
Top Regulated Brokers
Ultimately, this is a pair that I do like to the upside given enough time. The interest rate differential continues to be a major factor. With that being the case, I am looking at this as a potential buying opportunity, as the 50-day EMA has offered a bit of technical support.
The 0.83 level has been a bit of a magnet for price as of late, so I look at this through the prism of a simple return to the mean. That could be what we are seeing here.
Overall, I believe the market is still going to be more of a buy-the-dip market, as we see a lot of carry traders out there willing to take advantage of this. Of course, the Swiss are going to be facing the same problem that the Europeans are facing when it comes to energy this winter. This is a problem that the U.S. does not have, at least not anywhere near to the same degree.
The Swiss National Bank remains very loose and willing to hang on to 0% rates. With that, I think, all things being equal, this is a market that may try to get back toward the top of the range, closer to the 0.84 level, perhaps even further than that given enough time.
I have been long in this pair for quite some time. I have no issue whatsoever adding to it.
Ready to trade our daily forex forecast? Here are the best online trading platforms in Switzerland to choose from.