USD/CHF Forecast Today 06/06: Looking For Support (Video)
(MENAFN- Daily Forex)
The US dollar has rallied slightly against the Swiss franc in the early hours on Wednesday, as we are dancing around the 0.89 region. This is a market that I think will continue to be very noisy, and of course, the interest rate differential will continue to be a major driver of where we go next.
With that being said, I don't like the idea of shorting this USD/CHF market, at least not at the moment due to the fact that we have seen such a massive sell off heading into this area that it just makes more sense to look for a bounce. We had a massive run higher until recently, and the economic numbers in the United States have been slipping.
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So that's part of what we're looking at here. Given enough time, I think you've got to look at this through the prism of a market that is going to be very cautious. You have to keep in mind that the Swiss franc, of course, is considered to be a safety currency, just like the US dollar is.
So, with that, you know, I wouldn't get huge in any particular trade. If we can break above the 0.90 level, then I think you've got a real shot at the market breaking out to the upside for a bigger move. Finally, on the other hand, if we break down below the 0.88 level, that could open up a move down to the 0.8350 level. This is a bit of a stretch, but it is within the realm of possibility in this kind of environment. I believe volatility is here to stay, even in this market.
It's going to be a very noisy couple of days, especially with the jobs number coming down on Friday. But ultimately, I do think that the interest rate differential continues to be a major driver of where we go next, which of course favors the greenback. Traders may be looking at this area as a potential valuable opportunity.
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