The U.S. dollar continues to see momentum to the upside against the Swiss franc, as the interest rate differential continues to be a major factor here. With the central banks diverging, it makes sense that the buyers are still in control.
USD/CHF
The U.S. dollar initially started falling against the Swiss franc during the trading session on Thursday, but we've seen the area just above the crucial 0.83 level hold as support.
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The U.S. dollar continues to see a wide differential in rates between itself and the Swiss franc, and I think that's how this is going to play out. This is essentially the carry trade. The Swiss National Bank has recently stated that they are committed to the zero interest rate policy, while the United States is likely to raise rates in December. So, all of that being put together suggests that the U.S. dollar should be rated much higher against the Swiss franc.
Short-term pullbacks, I do think, end up offering buying opportunities
I've got no interest in shorting this pair. I've been long of the dollar against the Swiss franc for months, on and off, and will continue to build this position back up. If we can clear the 0.84 level, then I think the U.S. dollar has the green light to start looking at 0.85, 0.86, and so on.
Even if we fall from here, I won't pay the swap at the end of the day to short this pair. If I wanted to short the U.S. dollar, I could think of several pairs that I would be much more inclined to do so.
With this being the case, and the 50-day EMA sitting right around the 0.8230 level, I think there's plenty of support. So, any dip at this point in time, I think you would have to look at as a potential buying opportunity as you continue, like I said, to collect swap at the end of every session.
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