The USD/CHF pair initially fell during the course of the day on Tuesday but found enough support at the 0.95 support level to turn things back around and form a nice-looking hammer. Because of this, it appears that the market is ready to continue going higher, but we need to break above the top of the hammer in order to continue going higher. At that point in time I would anticipate that this market will try to find its way to the 0.98 handle, but that will take quite a bit of wherewithal and momentum. Because of this, I believe that this will be a very choppy move, but it should ultimately get there.
With all of this being said, it’s difficult to imagine a scenario in which I can sell this pair, simply because we have seen so much in the way of resiliency at the 0.95 handle. I think that the market will struggle to stay below there for any real length of time, and as a result I’m not even thinking about selling at this point.
Choppiness
I believe the choppiness will be the way going forward in this pair as there is a lot of noise between here and the aforementioned 0.98 handle. Because of that, I think that we will more than likely be stuck trading short-term charts, and simply taking our gains rather quickly as it’s going to be very volatile and difficult to justify risking money in this market for great lengths of time.
However, I do recognize that there is most certainly support, and as a result it should continue to obey this area. If we did break below here, I would have to rethink the whole situation but at this point in time I just don’t think the risk to reward ratio is there on a short opportunity. The Swiss National Bank has been active in the Forex markets again, although clandestinely, so having said that it’s likely that this pair will remain fairly bullish.
