• In my daily analysis of the dollar against the Swiss franc, it's obvious that we are paying close attention to the 0.85 level, which of course is a large, round, psychologically significant figure.
  • As a result, it makes a lot of sense that traders are debating whether or not we should go lower.
  • This is still an open question, but at this point in time, the market looks as if we are trying to find the floor.

The interest rate differential does favor the United States dollar. And we've had a couple of speakers at the Jackson Hole symposium suggests that the central banks around the world are not quite ready to start cutting drastically like traders are begging for. With that being the case, it makes a certain amount of sense that the U S dollar performs fairly well.

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Technical Analysis

From a technical analysis standpoint, not only do we have the 0.85 level offer in support, but we also have the stochastic oscillator crossing over and in an extremely oversold condition on the daily chart, we could bounce towards the 0.8750 level. I don't think it would make much of a dent in the psyche of the market as we will continue to see a lot of crazy volatility. Keep in mind, this is a pair that typically isn't very volatile or typically doesn't move that much. But yet, here we are. We are oversold in the short term, but I think we're probably oversold in the long term as well.

USD/CHF Forecast Today 23/8: Trying to Find Bottom (graph)

So, I think a lot of value hunters continue to come into this market and try to take advantage of cheap dollars. With that being said, I think this is a market that as long as we stay above the 0.84 level, we're probably okay, but dropping below that level could really put the hammer down on the greenback. If that happens, the markets overall will start to look very ugly.

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