Looks like USD/CHF is still stuck in consolidation since dollar traders are holding out for more clues on what the FOMC might do next. Here are some adjustments I’m making.
On the pair’s 4-hour chart, it looks like price is moving inside a symmetrical triangle pattern, likely waiting for the Fed decision before breaking out. Because of that, I’m thinking of tightening my stop to the top of the triangle just in case they do hike rates and a sharp rally takes place.
Still, I have a good feeling that the Fed would sit on its hands for now while keeping the door open for a December hike. If I remember correctly, by the time they hiked rates in December last year, practically everyone and his momma had already been expecting them to tighten. And this doesn’t seem to be the case for now since there’s still a good number of FOMC voting members who are on the fence.
I’ll be on the lookout for the CPI release later today to see if USD/CHF can gain more downside momentum on weak data. Import prices and PPI have been mostly subpar so I’m thinking overall inflation might fall short as well.
For now, I’ll stand ready to close early on a move past the .9900 major psychological resistance in case there are any strong signs that the Fed could tighten next week. This could potentially trim any losses down to around 0.35% instead of the 0.50% I’ve put on the line.
As always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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