(MENAFN- Daily Forex)

• The US dollar has rallied a bit against the Swiss franc during the trading session on Thursday as we are approaching the 0.81 level.
• The 0.81 level is an area that I think a lot of people are watching very closely.
• All things being equal, the market is likely to continue to see quite a bit of noise at this point, I think ultimately, this is a scenario where if we can break above the 0.82 level, then the market could really take off toward the 200 day EMA.

Short term pullbacks are offering buying opportunities all the way down to the 0.80 level. But keep in mind that Friday, of course, has a situation where we have the speech coming out of Jackson hole. And ultimately this is going to be a market moving event. But at the same time, I think a lot of traders are out there trying to figure out what the federal reserve will do next. And quite frankly, I don't know that Jerome Powell knows he at least isn't very clear about what he's doing. And that's going to continue to be a major problem.

I Expect Volatility

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So, with that being said, I expect a lot of volatility, but we are in the midst of trying to build up enough support here to change the trend. We'll have to wait and see if he does sound a little bit more hawkish than anticipated, that will be good for the US dollar. I think that's the real threat here. Keep in mind that the interest rate differential does favor the US dollar, so you get paid to hang on to this trade.

EURUSD Chart by TradingView

I have been long of the dollar against the frank for a minute now, but most of my gains are actually in the swap payment. Fine, whatever, I don't care. But at this point, now we have to ask questions, are we in the midst of a bottoming pattern? And I do think we're getting close. If we break down below the 0.80 level, then we probably drop to 0.79. And most of this is literally just going to come down to whatever it is Powell says tomorrow.

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