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Idea FX USDCHF – Bull Speculation: Breaking the Resistance Zone

Trading opportunities for currency pair: the dollar bulls have won back all their losses from “black Thursday,” 15th January, 2015.The USD/CHF has strengthened higher than the resistance zone at 0.9945-0.9971. You can aim at 1.0312 and 1.1331 again due to the growth of the dollar against both the euro and pound.

I did an idea on the Swiss Franc in December last year and back then expected the dollar to break the 0.9971 resistance with an estimated target of 1.0312 and 1.1331. Reaching of the 1.0312 level was expected by the end of March, 2015. 1.1331 was expected by the end of October, 2015. A force-majeure happened: the Swiss National Bank (SNB) shocked everyone with what they did. The franc’s rate against the dollar strengthened against the US dollar by more than 20%.

The regulator ditched the euro franc peg which it had pertained to for 3.5 years at 1.20 and dropped its base rate for deposits by 0.5%, to -0.75%. The Swiss Bank’s decision led to a sharp strengthening of their currency throughout the market. The SNB couldn’t have imagined how many brokerages would incur significant losses due to the strengthening of the Swiss franc.

The decision to scrap the lower limit for the euro/franc pair was taken completely independently and therefore produced such a market reaction. Thomas Jordan made note of this in his announcement. Ditching the peg was due to the expected launching of a Eurozone QE program.

What will Monday bring? The dollar bulls have won back their losses. The USD/CHF rate has strengthened above the 0.9945-0.9971 resistance zone. This means that one can expect a movement towards old the prices 1.0312 and 1.1331 from 29th December.

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Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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