USD/CHF had another tight range for the Friday session as the market ended up down slightly. The Swiss National Bank has put a floor in the EUR/CHF pair at 1.20, and announced that it is willing to fight strong Franc appreciation going forward, and with this it is going to be difficult to buy it for more than an ultra short-term trade. The US dollar on the other hand is the ultimate “safe haven” currency as traders will often run to the US Treasury markets in times of concern.
The recent global headlines have been poor, and the world is still concerned about the EU in general. The fact that the Euro has been selling off normally pushed the Dollar up in general. With this in mind, and the fact that the SNB is working against the Franc, we like buying this pair.
It must be said that the 0.93 level above is massive resistance. The area above could give way in a time of uncertainty, and if it does – we could see 0.95 in fairly short order. However, the area is currently keeping the bulls at bay, despite an almost continual push to get above it. The strength of this area has been impressive, which leads us to believe that if the breakout ever comes, the move will be strong and swift to the upside. Selling isn’t much of an option, at least for anything more than a short-term trade as the SNB is waiting below. With all of this in mind, we are willing to buy dips and closes on the daily chart above the 0.93 level. The markets have been fairly quiet, but it must be said that every time they fall – they recover. With that in mind we are willing to do a bit of scalping to the upside as well. It has worked lately, and should continue to as the world still want to buy Dollars, and doesn’t seem too interested in fighting a central bank at the moment. The Franc is without a doubt the least wanted currency presently, and should give way soon.
Written by FX Empire