The USD/CHF experienced a significant decline. However, it continues to operate within a wide consolidation range. Support is positioned around 0.79, and a breakout above 0.8150 may trigger bullish momentum, particularly with the possibility of SNB intervention on the horizon. The US dollar has experienced a notable decline against the Swiss franc during trading on Tuesday; however, it appears to be undergoing a phase of consolidation, in my view. The notable aspect is that the market has breached the 50-day EMA, raising the question of whether we can reverse course and exhibit signs of recovery.
Considering the current situation, even in the event of a decline from this point, there is a significant likelihood that the 0.79 level will maintain its role as a support level. The market has maintained a 200-pip range for several months, and indications suggest a potential decline toward the lower end of that range. Honestly, I find the prospect of purchasing the US dollar at the initial indications of a rebound appealing. At one moment during the past five or six sessions, it nearly appeared that the US dollar was poised to surge against the Swiss franc.
I do not believe this action reflects fear, such as individuals flocking to the Swiss franc. This observation pertains primarily to the US dollar, which has depreciated relative to several of its counterparts during the trading session on Tuesday. It is important to note that both of these are regarded as safety assets, which generally results in a somewhat sluggish movement for USD/CHF. However, I acknowledge that a breakout above the 0.8150 level could indicate a significant upward movement in the market. This indicates a favorable outlook for the US dollar in comparison to other currencies.
While there is compensation for holding the US dollar in this pair, which I have leveraged, I anticipate that if we experience significant upward movement, the US dollar will likely outperform all other currencies. Ultimately, I have no interest in shorting because the Swiss National Bank has recently indicated that it is monitoring the FX markets to assess whether they are becoming unstable. The Swiss National Bank may be poised to step in once more, potentially shorting its own currency to maintain a lower value for the franc.