(MENAFN- Daily Forex)

• The US dollar initially fell during the trading session on Thursday against the Swiss franc, but found support at a previous downtrend line, as we continue to see a lot of noisy behavior.
• We have bounced from that previous downtrend line, showing a potential break out above that trend line, and now I think most people are focusing on the large, round, psychologically significant figure just above.

Breakout? Maybe

At this point, it looks like we are trying to break out to the upside, but it's also worth noting that we have a significant large, round, psychologically significant figure coming into the picture to offer quite a bit of a ceiling, not only due to the options trading that will be done at that level, but also the psychology around it. Furthermore, we also have the 50 Day EMA hanging around that area, which a lot of technical traders will be paying close attention to.

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If we can break above the 0.80 level, then I anticipate that the US dollar will go looking at the 0.81 level above, which has previously been a bit of a ceiling in this market. With that being said, if we were to break above that level, then I think we have a very real situation where we would have a significant change in trend overall, and I think a lot of people would be watching that with anticipation. In the short term, I do expect a bit of choppiness, especially as the 0.80 level will be difficult to overcome. If we do, and if the United States dollar continues to fight other currencies, then I think it makes a certain amount of sense that we would follow to the upside.

On the other hand, if we were to break down below the 0.79 level, it be a bad sign for the US dollar against the Swiss franc, and then I think we probably continue to go much lower. I don't expect that to happen easily, but in that environment I would anticipate that the US dollar would be weaker against most currencies.

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EURUSD Chart by TradingView

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