USD/CHF Forecast Today 10/02: Eyes Breakout (Video)

(MENAFN- Daily Forex)

• The US dollar has rallied rather significantly during the early hours on Friday and then just simply kept going higher.
• This makes perfect sense despite the fact that the headline number in the United States failed to meet its target in the non-farm payroll report.
• This is because of the internals that show price of hourly wages continue to climb.
• The unemployment rate continues to go lower.

Well, what does this mean? This means that the Federal Reserve is likely to have to sit still for a while. At the same time, we already know that the Swiss National Bank is likely to continue cutting as they had a 50 basis point rate cut last meeting. So, for the US dollar to climb against the Swiss franc makes perfect sense. Furthermore, you have to keep in mind that we've been in an uptrend for a while, so it all plays together quite nicely for a potential breakout. The 0.92 level has been very difficult to get beyond, and we recently formed a double top there.

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So, I think if we finally break the 0.92 level, we have a real shot at the US dollar taking off perhaps all the way to the 0.95 level and maybe even as high as parity. We'll just have to wait and see. The 0.90 level seems to be significantly supported not only by the large round psychologically significant figure, but also the fact that the 50-day EMA sits there. Ultimately, this is a market that I think is in the midst of digesting some of the massive gains, but fundamentally speaking, it does make sense that the dollar continues to rise against the Swiss franc over the longer term. This has been one of my favorite trades of the last say three or four months.

EURUSD Chart by TradingView

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