(MENAFN- Daily Forex)

• USD/CHF briefly broke below 0.79 on Friday before recovering, reinforcing support as the pair works through a potential bottoming pattern.
• With a U.S.–Swiss trade agreement easing franc strength, traders are watching 0.80–0.8150 for developing upside momentum.

The US dollar fell significantly during the early hours on Friday to break below the 0.79 level, but then turned around to show signs of life. This is a situation where we have consolidation in a market that I think is in the midst of trying to form some type of bottoming pattern.

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With this being said, I think we have a situation where the 0.80 level and the 50-day EMA above could be a bit of a target, maybe resistance, but I think overall we eventually go to the 0.81 level. Breaking above the high at roughly 0.8150 that we made two weeks ago is obviously a very bullish sign. And the fact that the United States and Switzerland signed a trade agreement, or at least have agreed to a trade agreement, on Friday has released some of the pressure from the Swiss franc, and the Swiss National Bank may not have to intervene.

EURUSD Chart by TradingView

We'll just have to wait and see. Either way, this is a market I think that is in the midst of trying to form its bottom basing pattern. And eventually, we should see buyers come back in and try to take advantage of cheap US dollars. The US dollar has been relatively strong, but this is a little bit different pair in the sense that the Swiss franc is considered to be safer than the US dollar by some traders. So, it's going to be a grind, but this has reaffirmed the 0.79 level as being important. So now all we need is some type of follow-through going forward.

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