USD/CHF Forecast Today 28/01: Holds Strong Above 0.90 -Chart

2025-01-28 04:18:42

(MENAFN- Daily Forex)

The US dollar continues to show strength against the Swiss franc as we see a lot of noisy behavior out there
Despite the fact that Monday was so tough, the reality is that the 50 Day EMA has offered enough support to turn things around.
I think you've got a situation where you continue to see plenty of“buy on the dip” type of trading in this market.

Swiss National Bank

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Despite the fact that Monday was all about running toward safety, the reality is that the Swiss National Bank had cut interest rates by 50 basis points at the last meeting, showing signs of panic. This makes a lot of sense, considering that unfortunately for the Swiss they sent 85% of their exports into the European Union, a basket case of an economy. Furthermore, Trump is likely to put tariffs on the Europeans in specific areas such as automotive, which will only further weaken the European Union, which of course is Switzerland's biggest customer.

EURUSD Chart by TradingView

I suspect that one of the biggest concerns for the Swiss National Bank is that the strong Swiss franc will make their exports less palatable for Germans, Italians, French, etc. While there is a certain amount of inflow to Switzerland for safety by international traders and multinational corporations, the reality is that the Swiss banking system isn't as opaque as it once was, so the safety bid tends to be a lot shorter than it once had been. As the US dollar is climbing above the Fr.0.90 level, it does suggest that we are going to see a further rise in the greenback against the franc, and quite frankly that does jive well with the rest of the currency markets as I see it now.

Because of this, I do believe that we will continue to see plenty of buyers of greenbacks against the Swiss franc as well as other currencies, as interest rates remains stubbornly high in the United States and the Federal Reserve is likely to sit still on Wednesday, keeping rates much higher than the Swiss currently have.

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