- The US dollar has pulled back just a bit against the Swiss franc during the trading session on Thursday as we continue to consolidate in an area that a lot of people will be paying close attention to.
- The 0.84 level was massive support previously. So, the question is, are we bottoming?
- Well, we need to get well past the 0.84 level in order to convince most longer-term traders.
I think that’s the big question right now. Keep in mind that the Swiss franc is considered to be a safety currency. And while the US dollar is also considered to be a safety currency, the reality is that the US dollar is riskier than the franc under most circumstances. The 50-day EMA sits just above current trading right at about the 0.85 level. The 0.85 level being taken out to the upside, I think, would be the sign that we have something much bigger, a foot in this market, and we would more likely than not go looking at the 0.86 level and then the 0.88 level. On a pullback from here, I think we have a lot of support that extends all the way from the present area down to the 0.81 level.
Despite Downtrend, I Don’t Like Shorting this Pair
So, although it would be with the trend, I don’t know that this would be the pair that I’d be shorting the dollar in because quite frankly, any good news will probably turn it around. That being said, you can make an argument about where we could drop all the way back down to the 0.81 level, which would not necessarily be overly surprising. I expect a lot of choppiness in this pair, but I still think we are doing what we can to eventually turn things around. Remember, when you’re changing trends, assuming that that’s actually what’s happening, it’s normally a very messy and noisy affair.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
