USD/CHF continued to fall during the Tuesday session as the Dollar got sold off. The Swiss National Bank is currently working against the value of the Franc, but the trigger for intervention will be in the EUR/CHF pair. Because of this, that pair has to be watched in order to trade anything that is related to the Franc.
Currently, the EUR/CHF is about 100 pips from the “floor” at 1.20 that the central bank put in the market. Because of this – the USD/CHF will be able to fall until the EUR/CHF pair breaks below the 1.20 mark. Once it does – the Franc should be abandoned right away.
The level just below still looks supportive, and runs from the 0.91 handle to the 0.90 level. This could bring supportive action into the market, and as a result we aren’t willing to sell at this point. The buying of this pair needs a hammer or bullish candle to even think about it.
Written by FX Empire