The USD/CHF pair had an extremely quiet session on Monday as traders seem to be waiting for the results of the EU summit at the end of the week. The Franc has traditionally been a “safe haven” currency, but with the recent actions by the Swiss National Bank, the ability for traders to buy the currency has been severely impacted.
The Dollar is the lone “safe haven” at the moment, and as a result it has a bit of a built in bid in these types of markets. Switzerland’s biggest problem right now is Europe, which is by far its largest export market. With your customers not being able to afford your goods, this is bad news to say the least.
The pair has had signs of massive support in the 0.9000 level, and this should continue in our minds as the SNB is willing to get involved when the markets buy far too many Francs. The last couple of sessions have seen green candles, and even a hammer that suggests that the market wants to get long.
A breaking of the recent highs at the 0.93 level would be massively bullish in this pair. The 0.95 level is the next target if we can get through there, and the parity level would be next. The fact that you really can’t buy the Franc without fear of intervention makes this trade a one-way affair. The selling of this pair could be a quick way to find losses in this market, and as a result we continue to buy the dips as long as we can maintain a level above the 0.90 handle. The 0.85 level is roughly where the intervention talk from the Swiss National Bank sent this pair previously and we see that level as the “ultimate bottom”. We will continue to look to the shorter-time frames for dips that we can buy in this pair. If we get above the recent highs, we could see a long-term buy and hold trade form in this pair as the Swiss continue to work against their currency.