Trade Strategy
U.S. dollar/Swiss franc and Swiss franc/U.S. dollar can be tricky trades. The SBI Domestic Bond Index provides the most important indicator in terms of direction for both pairs. Typically, when the SBI and SMI are up Swiss franc/U.S. dollar is up and U.S. dollar/Swiss franc is down, a long and a short. The SMI is an ancillary indicator in this equation, and doesn't necessarily correlate directly with the SBI. Yet both are by far the most widely traded instruments on any given Swiss trading day. The tricky aspect occurs when the SMI is up, say, 10 points and the SBI can actually trade in negative territory. This can send U.S. dollar/Swiss franc and Swiss franc/U.S. dollar in quite different directions. For this reason, the SBI is ...
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