By:DailyForex.com
The USD/CHF pair initially tried to rally during the course of the day on Monday, but you can see that we struggled at the 0.9650 level. By doing so, we turned right back around and form a shooting star as we fell, and as a result it looks like we are going to continue the downward pressure that we’ve seen over the last couple of weeks. Alternately, you can look at the EUR/USD pair, which is forming a hammer and tends to be a bit of an inverse market to this one.
With this being the case, I believe that a break down below the bottom of the shooting star should be a sell signal in this particular pair as the Swiss franc continues to be a currency that people used for protection. The US dollar itself has been hurting for a moment, and I think it’s only a matter of time before we sell off again as the market comes to grips with the possibility that the Federal Reserve cannot raise interest rates anytime this year.
Swiss franc could strengthen
I believe that overall the Swiss franc could strengthen against many other currencies, but I think this has more to do with the US dollar in general. I believe that a break above the top of the shooting star would negate all that though, and could have this market reaching towards the 0.9750 region above. That would be a very bullish move, and would show quite a bit of momentum building up. However, we would also need to see some type of move lower in the EUR/USD pair, as the to attend to move in congruence.
I believe given enough time though, the US dollar will have been found to be a bit too overbought, and we could continue to see some of this type of action overall. Nonetheless, I believe in the short-term we could see a drop of about 75 or maybe even 100 pips.
