How is USDCHF Before FOMC?
All Eyes of Traders and Investors are on the Fed's Interest Rate Determination in the Upcoming New York Session
The FOMC, which will be held in the New York session, will determine the policies taken by the American central bank, namely The Federal Reserve or the Fed. Many think that the Fed will soon increase interest rates given the inflationary pressure that hit America to 7%. Not much different from America, Switzerland is also experiencing inflation problems and is struggling with Omicron eradication in its country.
Quick Recap on USDCHF
This major pair looks to be ranging with a bearish tendency in the long term, but recently, USDCHF seems to provide quite an interesting movement.
Let's dive in a little deeper to see how USD/CHF fare on multiple timeframes:
USD/CHF Monthly Technical Analysis
The USDCHF monthly timeframe is still ranging and tends to be choppy. However, we can draw a downtrend line which means the price movement is still bearish. The price is also moving below the 50, 100 and 200 moving averages. In the last few months, the price has been struggling to break the resistance at 0.93000 area which indicates a possibility that the price will fall soon.
USD/CHF Weekly Technical Analysis
On a weekly basis, we can identify the formed triangle pattern. Where the price continues to form higher lows but also lower highs at the same time. We can see that the price is in a narrowing triangle and will breakout in a few weeks. However, currently USDCHF is seen above the weekly support around 0.9100.
USD/CHF Daily Technical Analysis
The daily timeframe shows a bearish movement where there is a lower high and a lower low. Yesterday, the price closed bullish above the daily resistance which indicates the possibility that USDCHF will soon retest forming a lower high and fall back, at least towards weekly support.
Trading idea for USD/CHF
On H4, we can see there is a descending trendline that confluences with the Quasimodo area where there is a possibility that the price will go up towards that area to retest and then go down again.
Order: Sell Limit
Stop Loss: 0.92820
Target 1: 0.0.91800 (50% + BE)
Target 2: 0.91400 (25%)
Target 3: 0.91000 (25%)
Total Risk: Max 1-2% Equity (Medium Risk Setup)
Reason: Bearish structure, Quasimodo area of confluence with down-trendline.
ZFX Analyst’s Predictions
Investors are still waiting for the Fed's interest rate decision which will be released in today's New York session. There has been no confirmation or hint whether the Fed will change interest rates from 0.25%. We already know, when prices can be very volatile when there is high impact news such as the FOMC and price movements become unpredictable. There is a possibility in the New York session later during the FOMC, USDCHF will rise to the top to pick up liquidity to bounce back down from the resistance area.
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
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