Big USD CHF Short-Covering Rally Coming

Swiss Franc investors did not like the news that U.S. retail sales were worse than expected. Technically, the USD CHF posted a daily closing price reversal bottom.  

Swiss Franc investors did not like the news that U.S. retail sales were worse than expected. The recent break in the USD CHF suggests that Swiss traders had been betting heavy on a turnaround in the U.S. economy. Now that it looks like the U.S. economic recovery will occur at a slower pace than previously estimated, Swiss traders have once again become risk averse while seeking the safety of the U.S. Dollar.

Technically, the USD CHF posted a daily closing price reversal bottom. If Swiss trader appetite for risk diminishes, then look for a follow-through rally to the upside to confirm this current short-term bottom at 1.0976. The current chart set-up suggests a minor retracement to 1.2601 or a major retracement to 1.1359.