Since last December, the US dollar has rallied over 1000 pips against the Swiss franc. This is due to several different issues at the same time, not the least of which will be the Swiss National Bank keeping its monetary policy extraordinarily loose, but also as a function of money flowing into the United States. One simply needs to look at the stock markets in America to understand why money is heading there.
Out of the major economies right now, the United States stands head and shoulders above the others. With that, of course, comes money flow, and therefore we get charts like the one you are looking at. That being said, we are approaching the psychologically important 1.03 level, which is resistive and in my estimation starts showing signs of stubbornness at the 1.0250 level.
However, one cannot deny the trend that we are in. The trend, of course, looks very likely to hold, because not only do we have a nice trend line and not only have we recently broken an ascending triangle but now we also see the 50-day EMA, pictured in red on the chart, offering dynamic support as well. As it turns higher, this will fire off more algorithm trades to go long the greenback.
If and when we break above the 1.03 level, we may start to see the US dollar strengthen to levels much more historically accurate against the Swiss franc. After all, it wasn’t until the last couple of years that the Swiss franc was anywhere near parity. Buying on the dips will more than likely be the mantra going forward, so keep in mind that value hunters will be out there in full force. In fact, it’s a very difficult chart to look at and suggest there’s a shorting opportunity anytime soon.