The Dollar continues to draw strength from Friday's upside August payroll revision while the Swissy is benefiting from safe haven flows out of Asian currencies following the N.Korea bomb test news. Add to the Monday mix the fact that the US is observing Columbus Day and you are left with a very tight USD/CHF.
Early European los of 1.2590 reflected the safe haven impact but the easier bias was short lived as the Dollar worked higher vs Europe and the Pound. USD/CHF has failed at 1.2615 and is currently holding tight around the 1.2600 level. The bigger picture highlights the underlying bull run from early October lows around 1.2400. Mild corrective action has just taken the edge of the trend but the break above the 200-day moving average, staged Friday, is holding. The long-term average comes in at 1.2580 this session. In terms of bull side targets the market has Friday"s 1.2635 top and then 1.2665, a weekly trend line taken off the early March 2006 highs around 1.3230.
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