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MENAFN- Daily Forex)
During the trading session on Monday, the US dollar has rallied a bit against the Swiss franc as it had reached the bottom of a fairly obvious consolidation area. Because of this, it's not a huge surprise to see that we got a little bit of a bounce, but I would also point out that the United States wasn't even at work during the trading session, so volume could have been a bit of an issue. Because of all of this, I think we are just simply doing the same thing that we have been doing for some time, waiting to see whether or not there is reason to start buying US dollars hand over fist and eviscerate the Swiss franc.
While the Swiss National Bank has recently cut interest rates by 50 basis points, it still looks like the Federal Reserve is going to have to remain somewhat on hold. That means that traders continue to earn interest at the end of every day for holding this currency pair. Because of this, I think you have got a situation where traders will continue to bounce around and perhaps even by the dip. While I do not necessarily see a lot of momentum for the US dollar at the moment, it's very difficult to get short of this market right now.
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I think at this point we are still looking at consolidation, with the 0.8950 level offering support, and the 0.92 level above offering resistance. All things being equal, I think we stay in this range, mainly due to the fact that I don't see a lot of major information coming out of either one of these countries that would move the markets drastically in the next couple of days. Granted, Donald Trump can tweak just about anything at any time, so that would be the wild card.
The 0.92 level is an area that we need to watch very closely, because if we do break above there, then the market could very well go looking to the 0.95 level, followed by the 1.0 level beyond that.
Potential signal: I'm buying this pair right here, right now, with a stop loss at 0.8940. I would probably take profit near 0.9130, or at least have my stop loss moved to break even.
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EURUSD Chart by TradingView
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