USD/CHF Price Forecast – USD/CHF Rallies as Wide Rate Differential Keeps Longer-Term Bias Positive

From DailyFX, this is Chris for Lewis taking a look at the US dollar against the Swiss franc. The US dollar has rallied again against the Swiss franc as the interest rate differential continues to be a major driver of where we go. Ultimately, this is a market that I think will remain positive over the longer term, mainly due to the interest rate differential being so wide. Remember, the Swiss are basically zero bound while the Americans are in a situation where they may have to raise rates. Now, later in the day on Thursday, we did get word that potentially the Americans and the Iranians are working on a deal to reopen the Strait of Hormuz. And that does change some things, but I think short-term pullbacks probably still get a little bit of attention. The interest rate differential is so wide, it certainly isn't going to go in favor of Switzerland, but that could provide the little bit of a pullback that a lot of people want to see. The 0.82 level is an area of potential support. It was resistance, and it has shown itself to be support recently. And then after that, you have the 50-day EMA sitting just above that crucial 0.81 level. So, I think all in all, this ends up being a pretty positive-looking chart in general. I don't have any interest whatsoever in getting too cute here. I think you have to believe that potentially traders will continue to look for a reason to take advantage of the swap, and short-term pullbacks will more likely than not just simply offer an opportunity to get cheaper US dollars. Again, I have no interest in shorting this pair. >> Woo!