The USD/CHF pair is a market that has very recently gone underneath the radar of most traders. I have no idea why, because it is showing very clear technical levels, which of course makes it much easier to trade than many other markets. The session on Wednesday saw the market initially fall during the day, only to find support yet again at the 0.98 level. By bouncing from here, we ended up forming a nice-looking hammer which of course is a supportive enough reason to serve buying by itself. However, we ended up forming this supportive candle on a rather interesting looking level. This was an area that was rather resistive in the past, and as a result it should now be supportive. On top of that, you can see that the 61.8% Fibonacci retracement level has offered quite a bit of support. With all of that in one area, it makes perfect sense that this market looks ready to continue going higher.
Parity
I believe that this point in time the market is looking to go to the parity level, which is just above. A break above the top of the hammer would be reason enough to start going long, although quite frankly I feel that the market is supportive enough below to do so anyway. I think that we will break back above the parity level given enough time, but it might take a few attempts.
I’d be willing to buy short-term pullbacks that show signs of support as well, and would necessarily look for daily charts as trade signals. I think it is possible to trade this market from the short-term, as long as you continue to buy and not sell. Quite frankly, I would not be surprise at all to see this market go above parity and towards the 1.03 level given enough time. The Swiss National Bank has been working against the value the Swiss franc overall, so of course it should continue to soften over the longer term.
