The US Dollar was very noisy during the trading session early on Wednesday, as we are looking to determine if momentum can return to this pair.
USD/CHF
The US Dollar has been very noisy during the trading session here on Wednesday against the Swiss Franc as we continue to see a lot of noisy trading. The market is currently hovering around the 0.81 level, and the 0.81 level has been a bit like a magnet for price. With that being said, it's not a huge surprise to see that we are back here again. The 50-day EMA currently sits at the 0.8060 level and is rising. It is worth noting that the 50-day EMA has, in fact, been a bit of a support level and uptrend line. To the upside, we have the 0.82 level as a potential resistance level.
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Interest Rate Differentials and Long-Term Outlook
Ultimately, this is a market that could continue to be very noisy, and it probably will be. Interest rates in America have been slightly lower in US markets, but really at this point in time, the interest rate differential continues to see the US Dollar favored. The Swiss National Bank, of course, is working against the value of the Franc if and when it can, with it being pegged to a 0 interest rate policy.
All things being equal, this is a market that will continue to be very noisy and choppy, but nonetheless, you get paid to hold on to this pair at the end of every day. This is a longer-term trade for me, almost like an investment, something that I've been holding on to for a couple of months. All things being equal, I have no interest in shorting. This is a market that I remain long in and continue to collect profit via swaps.
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