The U.S. dollar continues to see buyers as the interest rate differential continues to climb, with the 10-year yield in America at 5.26% as I record this.
Ultimately, this is a market that will continue to pay you to hang on to it at the end of each session, and therefore, I think it attracts a lot of attention. The market has been very noisy and very bullish lately, but we have also seen a pretty significant move of two bullish flags. The second bullish flag has not been fulfilled as far as the measured move, which is closer to 0.84. I think that's probably pretty reasonable with the way this market looks right now.
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I clearly have no interest in shorting this market
I do think that traders at this point are probably looking for a much bigger move. In fact, based on longer-term USD/CHF charts, one of the levels that has really captured my imagination recently is the idea of the dollar going to 0.86.
The 0.82 level should continue to be support, as it was a previous swing high. Below there, then we have the 50-day EMA. Both of those are areas I'd love to buy the dollar at, but we are accelerating to the upside, not decelerating, so I'm not looking for that. I'm just wishing for that. Those are two different things.
If the U.S. dollar does roll over, this is not the currency I'll be shorting against. I certainly don't want to pay the swap at the end of every day, but this is essentially a one-way setup for me, and so far, that's playing out quite nicely.
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