The USD/CHF pair went back and forth during the course of the day on Tuesday, grinding sideways overall. I find this interesting as the EUR/USD pair tends to be the exact opposite of this pair, and then shot straight higher. Because of this, I have to wonder which currency pair is lying at the moment.
The 0.95 level below has been massively supportive, and I believe that support extends all the way down to at least the 0.94 handle. However, when you look at this chart you can see that there is a little bit of a descending triangle, and then of course suggests that we are trying to break down. However, I believe that the EUR/USD pair has to break well above the 1.10 level in order for this pair to break down at the same time. I think that today is going to be a very interesting session, as the Federal Reserve will speak its mind, and that of course will have quite an effect on the currency pairs around the world.
Federal Reserve
The Federal Reserve has an interest rate decision today, but more importantly it has an accompanying statement. It’s the statement that makes people concerned, as they can give us hints as to where the Federal Reserve thinks the economy is going, and more importantly interest rates. If we can get some type of sign of bullishness out of the US economy, and more importantly hawkishness out of the Federal Reserve, this pair should shoot straight up and more than likely break the potential descending triangle. If it does break higher, that pattern will completely disappear, and we should then head to the 0.98 level, and then ultimately parity.
I have no interest in selling this market until we get below the 0.94 level, and I would probably wait until the markets closed. This is only because I think this is an area that is going to be important, and most of the time these important areas can lead to the next several handles. With that, I’m not worried about waiting a few extra hours and perhaps giving up a few a dozen pips, as the rewards should be quite large.
