Partner Center Find a Broker

The big Fed event came and it looks like the market is staying Dollar long for now.

That makes this upside range break in USD/CHF one to watch for a potential play on continued broad USD strength. Check it!

USD/CHF: 4-Hour

USD/CHF 4-Hour Forex Chart
USD/CHF 4-Hour Forex Chart

In case you missed the big Fed event yesterday, the FOMC kept its hawkish tone on future monetary policy moves, signaling a hike very soon (likely in March).

They also did not rule out the idea of four interest rate hikes, but did point to waiting on balance sheet reductions until after rate hikes started.  This was a bit more hawkish than expected, so it’s no surprise the U.S. dollar spiked higher after the event.

With the Fed’s preferred inflation metric coming tomorrow (Core PCE Price Index), there’s a chance we could continue to see USD volatility into the weekend. And if that number comes in hotter than expected at 0.5%, then we may see more Dollar strength in the short-to-medium term.

If this scenario plays out, we’re checking out USD/CHF as a potential long USD play as the price action may attract technical traders along with the fundie players.

On the four hour chart above, we can see that the Fed event sparked an upside range break, pushing the market will past the strong resistance around 0.9270, which is now arguably overbought based on the stochastic indicator.

If the market does indeed dip ahead of the event, we’ll be on the lookout for potential bullish reversal patterns at the broken resistance area to potentially go long if we get a hot Core PCE number tomorrow.

And of course, if that number comes in below expectations, this upside break could quickly reverse as traders take some profits ahead of the week.

But what do y’all think? Is this the start of a bullish move higher or will short-term traders fade this Dollar move? Please let us know in our comment section below!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.