- The US dollar rallied a bit against the Swiss franc during trading here on Wednesday.
- As we wait for the Federal Reserve interest rate decision, this will be a major mover for the US dollar.
- So, it's a bit surprising to see this market just continue to climb.
But I suppose you could make the argument that perhaps people are closing out shorts ahead of such a volatile move. And of course, foreign traders, perhaps Europeans or Asians do not want to get a situation where the Federal Reserve announcement or press conference, which is more likely the case than not, could cause volatility and wake up to massive losses. It makes perfect sense that they might be a bit careful and about being over exposed.
Short Covering?
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So, a little bit of short covering probably propelling the market higher during the session. That being said, if the market closes above the 0.8150 level as we roll over at five o'clock New York time, then I think you've got a pretty reasonable signal that maybe the market is trying to find its bottom and continue to go higher.
Short-term pullbacks are possible, and could open up buying opportunities, but anything below the 0.80 level on a daily close then I think you would have no real chance of the US dollar turning things around. It's worth noting that the US dollar has strengthened against almost everything during the session. So, the Swiss franc won't be any different. I would anticipate a lot of volatility, but I'm watching that 0.8150 level. That, for me, is the sign that perhaps we are trying to take off to the upside. Remember, this is a pair that can be somewhat sluggish at times.
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