USD/CHF trading strategy
August 9, 2011
The currency of this export driven economy is seeing an extraordinary rise in value against major currencies. The safe haven Swiss Franc just recently moved to a fresh new high against the US dollar at 0.7267. The Swiss Franc is overbought and it is due for a major correction in the days to come. As intervention by the Swiss national bank looms, a long position above the 0.382 Fibonacci retracement may signal that resistance may be weak on the upside. That level can be found on the 0.7476, this way since the current bottom was at 0.7267, a long entry at 0.7476 may provide a good opportunity to ride the wave up for the major correction. If the Swiss Frank supporters prevail, at stop at 0.7600 may be a safe position.
I will not get into the latest drop but the Swiss Frank seems to have a lot of room left since fear in the US market is still present. Waiting for it to retrace and see if the 0.7500 can't be breached may open a good short opportunity for this pair below the price level.