- The U S dollar has gone back and forth during the trading session on Monday against the Swiss Franc. As we continue to dig into this previous noisy behavior, this is an area that should offer a bit of support and it'll be interesting to see if we can turn around and take out the 0.90 level above.
- After all, I don't really care what people think about the bond market. The reality is that the interest rate differential between the US dollar and the Swiss franc will continue to be wide enough to drive a truck through.
- It is probably only a matter of time before we bounce, but the question then becomes, when do you buy? That's obviously the biggest question here.
- I think if we can get a daily close well above the 0.90 level, that might be a signal. But even If we do break down below here, I see multiple areas that could offer support. For example, the 0.89 level is an area that's been important. And we may be entering a pocket of potential support based upon the fact that the market is between the 50 day EMA above and the 200 day EMA below, typically an area that causes a lot of noise overall anyway.
The Last Two Days Have Been Ugly
The candlestick on Friday of course was pretty ugly, just as the Thursday one was, but really at this point in time, it's a long cry away from being a market that's going to fall apart. Yes, the one thing that I do pay attention to is that the 0.92 level has been like a massive ceiling for basically a year and a half, but at the end of the day, it'll come down to what the Swiss do next, after that surprise 50 basis point rate cut, which of course showed just how concerned the Swiss National Bank was. I still believe in the upside. I also believe that this is going to be choppy and messy to say the least.
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