- The US dollar rallied during the trading session on Thursday to show strength again against the Swiss franc.
- This is a pair that I’m watching very closely, because we are starting to see a lot of strength in the US dollar against multiple other currencies, and this is the pair where I think you might have the most “runway” to continue going much higher.
- The size of the candlestick is bullish, and now I’m watching the 0.81 level to see if we can break above there. If we can, then the US dollar could very well start to take off to the upside, perhaps even trying to get to the 200 Day EMA.
Trend Changing?
At this point, we can’t really say that the trend has change, but it does look like it’s in the state of doing so. If that’s going to be the case, then breaking above the 0.81 level opens up the possibility of a much bigger move. In that environment, we could go looking to the 200 Day EMA, which is near the 0.82575 level, and dropping. If we can break above that level, then it’s likely that we will go much higher. Short-term pullbacks I think will probably see a bit of support near the 0.80 level, which also is an area that we find the 50 Day EMA resides.
Ultimately, this is a market that I think given enough time probably continues to go higher over the longer term, assuming that the US dollar continues to strengthen. That being said, the Swiss franc is also a safety currency just like the US dollar is, so possible that the pair doesn’t rally as much as the US dollar will against multiple other currencies. Nonetheless, the US dollar could continue to attract inflows, even from traders who would typically hold the Swiss franc. I think we are on the verge of something special, but we’ll have to wait and see whether or not there’s any follow-through.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
