On the upside, the 200-Day EMA sits just below the 0.95 panels, so a break above that level opens the possibility of a much bigger move.
- The USD/CHF has gone back and forth during the trading session on Monday, as we continue to dance around the 50-Day EMA.
- Keep in mind that most traders out there are willing to sit on the sidelines between now and the Federal Reserve meeting on Wednesday, as the next question will be whether or not there is going to be a significant amount of hawkish behavior coming out of the Federal Reserve or are they going to blink due to the fact that there have been so many concerns about the global banking system.
At this point, Switzerland is the epicenter of the biggest problems, but something tells me there’s a lot more out there. Because of this, we will have to pay close attention to how the US dollar behaves, and it is probably worth noting that we are sitting just above the 0.90 level in a consolidation region, and therefore we might be trying to find buyers on a longer-term standpoint. After all, the longer-term charts have shown the 0.90 level to be a massive floor in the market, so one would have to assume that there is a significant amount of “market memory” in that area.
If we were to break down below the 0.90 level, then it’s possible that we could drop down to the 0.88 level, which is also an area that has been important as well. On the upside, the 200-Day EMA sits just below the 0.95 panels, so a break above that level opens the possibility of a much bigger move. Caution is the better part of valor at this point, so I do think the next couple of days might be very short and choppy as far as the range is concerned.
However, if the Federal Reserve seems to be much more hawkish than a lot of people are trying to price and, that could send this market right back to the upside and perhaps all the way to the parity level above, which has been significant resistance multiple times in the past. With, I think we are at the bottom part of a larger range, but keep in mind that this pair does tend to be very choppy and therefore it does make a certain amount of sense that we would see plenty of momentum once we get through the FOMC statement.
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