- The us dollar has skyrocketed during the trading session on Monday against the Swiss Franc, but we are still in an area where I’d be somewhat cautious.
- The area between the 0.8 zero level and the 0.8 one level offers a significant amount of noise.
- We have the 50 day EMA at the top of the range.
So, with that being said, this is a market that I think continues to see a lot of questions asked about the market. And I do think you need to be very cautious about expecting too much in this area because we need to get through previous support. So I am of the mindset that if we do in fact, break above the 0.81 level, then I become a buyer of the US dollar against the Swiss franc.
A lot of this may or probably was a reaction to the trade and now trade situation between the US and the European Union getting settled. And therefore, maybe the US dollar got a little bit of a boost due to the fact that it should take some of that risk premium out of the United States that we had seen recently.
Can We Continue from Here?
Now the question is can we continue, and I think that’s a question that we are going to have to sort out over the next couple of days. But again, I’m looking for a daily close above the 0.81 level to start buying. If we break down from here, it’s not until we break down below 0.79, I start selling because I do think that we’re in the midst of a consolidation pattern, especially when you look at the interest rate differential between the two currencies, I don’t like paying swap at the end of every day. If I can avoid it, this has been a very strong candlestick and I think that’s a good sign, but it doesn’t necessarily mean that we’re ready to break out again. want that confirmation above the 0.81 level to start buying. At that point, I think this becomes a longer term buy and hold type of scenario.
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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.