USD/CHF Forecast 01/05: US Dollar Drops As Rates Fall

(MENAFN- Daily Forex)

The US dollar has fallen against the Swiss Franc pretty significantly during the early hours on Thursday but has since shown signs of bouncing from a previous resistance barrier in the form of 0.7825. With that being the case, I do think that there's a real chance that we will bounce from here. In fact, I am looking at these moves as buying opportunities.

I like the idea of getting long on the first signs of any follow-through. The market continues to see a lot of noise in general here, but the overall attitude I believe is one of hesitation, one of noise due to the nonsense coming out of the Middle East and the latest problems when it comes to the overall directionality of markets due to interest rates.

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Interest rates are all over the place and this is something that if that continues, we need to look at this as a market that you have to shorten the time frame in and with the idea that eventually traders will have to sort out what it is they think the overall rate situation and risk appetite of markets in general end up being.

I think we have a scenario where eventually the Swiss Franc weakens quite drastically, but as things stand right now, there are enough things out there to have people concerned that it just won't roll over and fall apart, much to the chagrin of the Swiss National Bank.

I am a buyer of the USD/CHF pair and not a seller. I like the idea of taking advantage of the interest rate differential which is still pretty wide. Small positions with a longer-term mindset should pay off.

EURUSD Chart by TradingView

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