The USD/CHF pair has taken a bit of a backseat to several other currency pairs recently, as there have been plenty of headlines involving the Pound, Euro, and Yen. Because of this, I feel that the markets aren’t paying much attention to this pair, and missing potential trades that are possible in the near-term.
The US dollar has been rising recently against the Swiss franc, and on Friday, we testing the 0.98 level. This area has been both support and resistance from time to time, and the Friday session was no different. We did test the area, but pulled back just a bit towards the end of the day. This is probably due to people squaring positions before the weekend, which is a common occurrence in the Forex markets. Because of this, I feel that the pullback is of no real significance.
The pair broke above the 50 day exponential moving average during the session on Thursday, and then touched the 100 day exponential moving average during the Friday session. The 0.98 level has also offered a resistance. The shape of the candle is of course positive, and with this I feel that this pair will more than likely rally above the resistant level above. Ultimately, I believe that this pair will reach to the parity level, as it is a natural target for traders.
The candle from the Thursday session was a hammer, and this is also supportive and bullish. In other words, I believe that we not only have strength from the Friday session, but also previously. This is only compounded with the Commodity Channel Index below on the chart showing a reading above the 100 level, a sign of real strength building up. Because of this, I think that there is enough interest in this pair to continue to push it higher, but I fear that the majority of retail traders will be distracted by all of the noise around the Euro, Pound, and Yen that this will keep a lot of retail traders from seeing this set up. It is with this hope that we point out the pair. The USD/CHF pair automatically seems to take a back seat to the EUR/USD, GBP/USD, and USD/JPY pairs, but shouldn’t be ignored.