The USD/CHF has rallied a bit during the trading session on Friday, as it looks like we are trying to form some type of falling wedge, which can be a bullish pattern. If we can break above the 0.94 level, it’s very likely that the US dollar will continue to climb, and it is probably worth noting that the 0.92 level is an area where we have not only psychological support but an area where we have seen buyers in the past.
If we were to turn around and break down below the 0.92 level, then it’s likely that the dollar could drop down to the 0.90 level. However, as I look around the Forex world, it’s worth noting that a lot of the major currencies are forming candlesticks against the greenback which suggests that we may see US dollar strength next week. It would make a lot of sense because the interest rates continue to favor the US dollar, and quite frankly there’s a lot of fear out there. Whenever there is fear, the US dollar does well.
We Will See a Lot of Choppy Behavior
- In this scenario, I do expect that the US dollar may be a major beneficiary of price action, but it’s also worth noting that the Swiss franc is also considered to be a “safety currency.”
- However, Switzerland has the problem that over 85% of its exports go into the European Union, which in and of itself is a significant mess.
- With, it’s likely that we will see a lot of choppy behavior, but it does look like we are during trying to bottom.
If we were to break above the 0.94 level, then I think it’s very likely we could go looking to the 0.96 level. This is the top of the falling wedge, which would be your initial target. However, when I look at longer-term charts, it’s very likely that we could go to the parity level, which was the top of the overall consolidation region. Nonetheless, it is very unlikely that the thing driving this pair will probably be interest rates that command the United States more than anything else. On the other hand, if we were to break down below the 0.92 level, then we would probably see the US dollar not only fall here but fall in multiple markets.
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