USD/CHF, EUR/USD and GBP/USD Forecast – US Dollar Jumps in Risk Off Move

USD/CHF Technical Analysis

The US dollar has rallied rather significantly against the Swiss franc, which is interesting considering that the Swiss franc is considered to be the ultimate safety currency, but the fact that Europe is now going to be struggling to find energy certainly plays into that equation as well.

We are threatening the 0.79 level, and the question now is have we bottomed? I think it’s a little early to call that, but if we pull back and can hold the 0.78 level, the carry trade may very well be alive and well here.

EUR/USD Technical Analysis

The euro has fallen to the 1.16 level and quite frankly, I wouldn’t bet on any significant rally from here. I think the euro could very well drop down to the 1.15 level. If it gives that up, then the euro is going to plunge.

We do see a problem with energy in Europe all of a sudden, and of course, the US dollar being a safety currency helps a lot as well.

With everything coming together all at once, the US dollar will be where people run to for safety. This isn’t to say that we can’t bounce from here, we certainly can, but it’s very likely that the top has been put in and rallies should be faded.

GBP/USD Technical Analysis

The British pound has broken significantly during the trading session to the downside as well, and we are well below the 200-day EMA. If you watched my analysis yesterday, I said if we close below the 200-day EMA on a daily chart, I’d be interested in shorting.

That’s still true here. We’re waiting to see whether or not that remains to be the case. Short-term rallies should end up being selling opportunities on signs of exhaustion. I think the market could drop down to the 1.31 level before it’s all said and done, but only time will tell. Clearly this is not a market that you should be trying to pick the bottom in.