The USD/CHF pair shot straight up during the session on Wednesday, eclipsing the 0.9450 resistance area. However, the market is running into the 0.95 handle, an area that has been significant resistance in the past. While this market certainly looks bullish, and the Swiss National Bank has no issue at all with a weaker Franc, it looks like a pullback is probably necessary at this point as the move has been so parabolic.
Looking forward though, I think any pullback that shows signs of support going as low as 0.93 would be an interesting entry on the long side in this market. Alternately, we could go through the 0.95 resistance area, and I of course would be buying that as well I daily close. Looking at this chart, I can deftly see that a large massive "W" pattern is emerging, which of course is massively bullish. If you measure from the top to the bottom, it is roughly 500 pips, which means a breakout would get us back to parity finally. Again, this is something that the Swiss would be perfectly comfortable with, and the Federal Reserve, although massively dovish, probably doesn't care much about. After all, trade between the United States and Switzerland is minimal at best.
Buying the pullbacks
Going forward, I can see no better strategy than to simply buy the pullbacks. There should be plenty of opportunities, and I think this is one of those pairs that I will be buying on the shorter-term frames in order to buy over and over again and again. I will play this more as a short-term market, as it is not nearly as volatile as some of the other words, so I can keep my stops relatively tight.
The candle for the session on Wednesday was very long and very green. This is always a bullish sign obviously, and as a result I am more enthusiastic about going long this pair then I am shorting the EUR/USD, which it generally runs counter of. Since this is the inverse of that market, obviously a breakdown in the Euro would certainly help this pair go much higher as well. Either way, I am buying the pullbacks, and expect to be picking off small trades in this market for the foreseeable future.