By: Mike Kulej
The Swiss Franc just keeps on getting stronger, prompting the Swiss National Bank to start issuing vaguely disguised threats of intervention. Little surprise, really, since the Franc is at all time extremes against many currencies, including the Pound, the Euro and the Dollar.
In case of the USD/CHF, the price dropped to 0.8078. At this point one could expect to see the 0.8000 tested – it is a very important psychological level. Besides, lacking price history, round numbers are just about the only areas to offer logical support levels.
.jpg "USD/CHF Analysis, July 18, 2011")
Of course, it does not mean that the USD/CHF must touch 0.8000. For what we know, it could have already found support at 0.8078. On the daily chart, we can see a large hammer, often a sign of a price reversal. However, that was followed is a doji, which, in turn suggests indecision. This is compounded by a fact that this doji also happens to be an inside day.
Now we need to see what happens on Monday. A bearish candle would indicate a strong probability of the USD/CHF heading even lower. On the other hand, a bullish candlestick will skew the odds in favor of a reversal. We shall find out soon.