Looking ahead, analysts say to a large extent the trend in the U.S. dollar will be the key determinant of dollar/Swiss action. Callow forecasts renewed declines in the USD/CHF rate toward the 1.15 area over the next several months, assuming a negative bias for the dollar.
That level roughly coincides with daily chart support around the 1.14 area from mid-March. A more important floor on the daily chart is seen at the 1.12/1.13 area, the lows from December and January. The 1.13/1.11 zone represents major long-term support evident on the monthly chart.
“If the U.S. dollar resumes its weakening trend, as we expect later in the year, the big level to watch is the 1.11 area, the 1995-96 base from the last major cyclical dollar downtrend,” says 4Cast’s Gullberg.
If declines were seen below that zone in dollar/Swiss “we get into the realms of dollar crisis territory with EUR/USD 1.40 and rising,” Gullberg concludes.
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