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FxWirePro: USD/CHF trapped in bull/bear fight
Thanks to the recent weakness in the value of USD against a wide range of currencies has helped the USD/CHF bears to regain control from the bulls. The bears have been gaining control since May, as the rate declined from 1.024 area to 0.99 area. However, the dovish comments from the U.S. Federal Reserve accompany with a dovish rate cut forecast to the tune of 50 bps has given the final push.
The exchange rate has now declined to 0.972 area.
The bears are clearly in near term control and the rate is already down more than 500 pips from the last peak. Further downside possibility remains with Bears aiming for a test of 0.92 support area.
However, a drop of another 500 pips unlikely to be smooth with sharp decline as the Bulls has a very strong base around 0.95 area, where longer horizon speculators likely to enter positions aiming 1.07 area.