The USD/CHF pair shot straight up during the Friday session as the Dollar climbed against almost all currencies globally. The Spanish announced that they are going to miss expected debt levels, and this sent the Euro and all things related to it lower. The European currencies all got hit, including the Franc, Euro, Pound, and Forint. The pair slammed into the next consolidation zone, so it looks like this rally could have legs after all.

The breaking of the doji from Thursday was going to be our signal for the session, and as a result we are long. We expect a bit of a pullback as we are running into resistance now, but the overall trend seems to be changing as the recent surge suggested. As the 61.8% Fibonacci level held, we think that the uptrend is about to move into higher gear. The breaking above 0.9250 level will almost undoubtedly send this pair to 0.95 in relatively short order.

The 0.95 level should be the next fight, but overall we still believe this pair will see parity before the end of the year, and continue to buy pullbacks as the Franc is being worked against by the Swiss National Bank. The SNB is monitoring the EUR/CHF pair, and keeping it above the 1.20 level. Any intervention in that pair would also send this pair higher. Because of this, we think that the real risk is to the upside as the EUR/CHF pair currently sits about 50 pips above that line the SNB created.

The US economy is improving as well. When all things are thought out, it makes sense that the Franc will weaken against the Dollar because of simple economics. The Swiss send 80% of their exports to the Europeans, and as they are going into recession - the Swiss will be looking for customers. With this in mind, all dips are buying opportunities to us, and will be treated as so. This will only be changed if the EUR/CHF is suddenly allowed to float to whatever level the markets take it. This is very unlikely to happen - so we only sell the Franc.

USD/CHF

USD/CHF Forecast March 5, 2012, Technical Analysis

USD/CHF Pivot Points (Time Frame: 1 Day)

 Name  S3  S2  S1  Pivot  R1  R2  R3

 Classic
0.9000
0.9032
0.9086
0.9118
0.9172
0.9204
0.9258

 Fibonacci
0.9032
0.9065
0.9085
0.9118
0.9151
0.9171
0.9204

 Camarilla
0.9116
0.9124
0.9132
0.9118
0.9148
0.9156
0.9164

 Woodie's
-
0.9038
0.9097
0.9124
0.9183
0.9210
-

 DeMark's
-
-
0.9188
0.9126
0.9102
-
-