The USD/CHF pair fell on Thursday as the Dollar continues to get hit overall. However, the later hours of the session saw a bit of a bounce in this pair, and the dollar as a whole got a bit of a reprieve. The resulting candle for the session was a hammer sitting right on support at the 0.91 level.
The support area goes all the way down to the 0.90 handle, and should be considered a major force in this market. The Swiss are actively working against the value of the Franc, although not in this pair directly, and this will continue to make buying the Franc or shorting this pair difficult. The pair moves inversely to the EUR/USD, and it should be noted that the EUR/USD pair didn't exactly shine during the session. As that pair falls, this one rises, so perhaps this is a hint at things to come.
We are ready to buy this pair on a break above the top of Thursday's range, and would target at least 0.92 on that move. Honestly, we actually would believe that the pair could rise as high as 0.96 again, but this could be a very choppy trade as the world in general doesn't like the Dollar. However, we are only one really bad headline out of Europe away from that changing instantaneously.
The buying of this pair will continue to be our play as the most recent trend saw a great upsurge in the Dollar, and the issues in Europe are certainly far from being fixed. The Swiss economy will suffer as a result of European woes, and this should continue to bring money back in to the United States as the American economy seems to be improving - at a time when few others are. This will more than likely be fueled by the stock markets in America outperforming so many others.
With this in mind, we buy a break above the range form Thursday, and also on dips going forward until we get at least to the 0.95 level where real selling pressure could come back.
USD/CHF Forecast February 10, 2012, Technical Analysis
USD/CHF Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3