The USD/CHF pair is one that has been rather consistent lately, as we continue to grind slowly downwards. Recently, we have seen an attempt to break above the 0.9500 level, but we failed on Tuesday and formed a shooting star. However, if you look beyond the first glance, you can see that there is the possible bullish flag been formed. If that's the case, we could see a significant move higher.
In fact, the measurement of this bullish flag suggests that we will see a move all the way up to parity. Quite frankly, that's a very insignificant pullback in the massively bearish move that we've seen over the last several years. Is because of this that I think it's very possible that this happens. It's kind of funny actually, as the Euro has taken all the headlines, people have simply forgotten about this pair while it has performed quite well since New Year's.
Breaking the shooting star
The breaking of Tuesday's shooting star would be a significant move higher. This would break not only the resistance shown by the candle, but would also show the 0.95 level being overcome again. Remember, when a support or resistance level has been broken before, it's much easier to do it again. Is because of this I think it will eventually happen, and we could see a significant move higher almost immediately. This would more than likely coincide with money leaving euros, and heading towards the United States. In fact, I think this is coming quicker than most people realize.
People with large amounts of money will feel much safer with their money being held in New York banks than European ones. Even though the German banks are considered much safer, they still run the risk of having issues as the rest of Europe could bring them down. If you have large amounts of money, certainly you wouldn't have any issue moving it from Frankfurt to New York, as the Americans have already shown that they are not going to let depositors take losses. With this being the case, I believe the exodus of capital from continental Europe, including Switzerland, will continue.
