USD/CHF Forecast August 6, 2015, Technical Analysis

Christopher Lewis

The USD/CHF pair went back and forth during the course of the day on Wednesday, testing the 0.98 handle. This is an area that is a large, round, psychologically significant number, and an area that we have seen resistance and previously. With this, it makes sense that we struggle to get above, but we look at pullbacks as potential buying opportunities. Quite frankly, we may just simply need to build up enough momentum to break out.

Keep in mind that the Swiss National Bank has been shorting the Swiss franc against the Euro, so there is the possibility that there has been a bit of a “knock on effect” in this pair, and as a result it makes sense we go higher. On top of that, the United States dollar of course is the strongest currency that we follow at the moment, and as a result it makes sense that we should continue to go higher. With this, we are looking for this market to go to the parity level but we also recognize that pullbacks for momentum are just simple opportunities to start buying yet again.

We have the Nonfarm Payroll numbers coming out on Friday, so of course we could get a bit of hesitation as far as momentum is concerned. Nonetheless though, we feel that this market should offer more than enough bullishness to continue going higher given enough time. We also recognize that the 0.95 level is the absolute “floor” in this market, and we also believe that we aren’t going to break down below there anytime soon. In fact, we think that the 0.96 level is fairly stingy as far as support is concerned as well.

With this, we think parity is probably more likely area to target of the longer term, and we could even be beginning a longer-term uptrend given enough time. With the Federal Reserve raising rates later this year, and the Swiss National Bank nowhere near it, it makes perfect sense of this pair continues to go higher, especially with the European Union struggling.


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