- This is Christopher Lewis taking a look at the US dollar against the Swiss franc.
- The US dollar has risen a bit against the Swiss franc during the trading session as interest rates in America continue to be relatively stout.
The area of focus right now is the 4.10% level and if those rates continue to climb, it makes a lot of sense that the US dollar should against the weaker currencies with almost no interest behind it, such as the Swiss franc. So, with that, I have to ask questions whether or not we had just formed a bit of a double bottom near the 0.76 level. If we were to break down below the 0.76 level, then the market drops to the 0.75 level.
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Keep in mind that the Swiss National Bank has complained more than once that they are getting ready to try to sort things out and determine whether or not they can influence the market by jumping in and shorting the franc. They have intervened multiple times and I think this probably will continue to be the way forward as they try to keep exports flowing out of Switzerland.
It's a race to the bottom in Switzerland and while the United States dollar isn't the most concerning currency to them, it's probably a close second as the majority of Swiss exports end up into the European Union, so it's the euro against the franc that everybody worries about. However, when you talk about international finance, it's all about the US dollar.
If we can break above the 50-day EMA, we go looking to the 0.79 level and then eventually the 200-day EMA. If we pull back, I'm looking to buy on dips. I do think eventually we turn things around and you do get paid to get long of this pair with the core PCE numbers coming out on Friday. That could be a big mover as well as it is the Federal Reserve's favored inflation indicator.
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