The US dollar has rallied significantly during the trading session on Wednesday, as we continue to see a lot of volatility in the markets, but at the same time, we are looking at a nice carry trade.
USD/CHF
The US dollar has rallied significantly during the trading session here on Wednesday to break the back of a shooting star against the Swiss franc that had formed on Tuesday.
We now find ourselves at the crucial 50-day EMA, and it'll be interesting to see whether or not we can continue this upward behavior. After all, keep in mind that the interest rate differential still favors the US dollar by a wide margin, and we have a speech coming out of Jackson Hole on Friday by Kevin Warsh, the chairman of the Federal Reserve, that could set the tone for the next couple of months.
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Jackson Hole Speech and Technical Levels
If he sounds even remotely hawkish, the Swiss franc is probably going to get hammered. If he sounds dovish, that could turn things around. And I find it interesting that as we head towards this speech, we are in fact heading toward a consolidation range.
Longer term, I'm still bullish, and it's worth noting that we had bounced from the 61.8% Fibonacci retracement level, an area that a lot of technical traders will pay close attention to. And therefore, I think you have a situation where the strong candlestick kind of gives you a little bit of a heads up.
And with this, it's possible that traders will continue to look at short-term dips as buying opportunities. I certainly will. I'm very bullish of this. I've been bullish of this for months. If you watch this channel, you know that. I continue to get paid at the end of every day.
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