USD/CHF rose during the Wednesday session as the issues in Europe seem to keep compounding. The Italians now have to pay more than 7% for their 10 year bonds, and this is seen as a possible “point of no return” in this debt market. With this in mind, the US Dollar was bought hand over fist, and the CHF fell as a result. As an added incentive, the Swiss National Bank is talking down the Franc as well, making the USD one of the last remaining “safe haven” currencies. With this in mind, we feel that the longer-term direction is to the upside, but the near-term could be a real slugfest. But with the SNB fighting to push this pair upwards, we are only buying on dips and not selling at all.
Written by FX Empire