(MENAFN- Daily Forex)

• The US dollar rebounded against the Swiss franc on Tuesday, signaling a potential bottoming pattern after months of decline.
• With SNB intervention risks and broad dollar strength, the pair could target 0.83, 0.85, and possibly 0.88 longer term.

The US dollar initially pulled back against the Swiss franc during trading on Tuesday but found enough support to turn things around and start rallying again. The US dollar is starting to strengthen against most currencies, and the Swiss franc probably won't be any different. Both are considered safe assets to hold, so you will see a little bit more of a grind here than in other currency pairs. But at the end of the day, the market breaking above the 0.81 level opens up the possibility of a bigger movement.

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I do think that we are in the midst of forming some type of bottoming pattern in what has been a wicked downtrend that suddenly stopped in July. Adding more fuel to the fire, there have been comments coming out of the Swiss National Bank that they are, in fact, willing to go into the currency markets to intervene if things get out of hand. Quite frankly, they are known to do that anyway, so that is a threat that the markets take seriously.

EURUSD Chart by TradingView

Combining the Swiss National Bank's willingness to short its own currency and the fact that the US dollar has been strengthening overall-as the US dollar index is now crossing 100-I think it sets up for a nice longer-term buy-and-hold trade here, but you may have to be patient. This is a pair that tends to move fairly slowly and choppily, but you get paid at the end of every day to hold this pair, and therefore, I think it's a decent value, especially if you can find it on some type of pullback that offers cheaper US dollars. Longer term, we could go as high as 0.88, with a couple of areas of interest in the form of 0.83 and 0.85 above.

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