Anyone else looking for dollar trades after this week’s FOMC event? I found a possible forex trade opportunity on USD/CHF!
Was this week’s FOMC meeting minutes confusing or what! No, seriously. What’s up with the mixed signals?!
If you were around during the Fed’s minutes release, then you’ll know that the majority of Janet Yellen’s gang have decided to wait around for more data before making plans for a rate hike. Not cool, especially since FOMC members such as Dudley and Lockhart have hinted they they see at least one interest rate increase this year.
In any case, yesterday’s economic release brought the dollar down across the board, enough to drag USD/CHF down to the .9600 area. Interestingly, the major psychological level (MaPs) lines up pretty well with a rising trend line that makes up a symmetrical triangle on the daily chart. What’s more, stochastic is also about to hit the oversold levels.
As the School of Pipsology tells us, symmetrical triangles like this one can break in either direction. If the dollar holders continue to unwind their rate hike expectations this year, then we’ll probably see a downside break for the pair. On the other hand, if the Greenback gains back (hey, it rhymes!) its momentum, or if risk aversion dominates the markets, then the bulls just might jump in and place their long trades.
What do you think? Will USD/CHF break its trend line anytime soon? Or does the pair have enough room to bounce along the triangle some more before choosing a direction?
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