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USD/CHF Signal - FOMC positioning - 12 Dec 2016

Signal details
Entry Price: 
1.0180
Close Price: 
1.0139
Direction: 
Low
Expiry Time: 
21:00 GMT
Result: 
ITM
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The Fed's 2-day FOMC meeting starts on Tuesday which concludes with the FOMC statement being published on Wednesday, 14 December. The markets are pricing in a 25 basis points rate hike from the Fed and the focus shifts to the forward guidance from the Fed.

The market expectations are currently looking at two rate hikes in 2017 pushing the fed funds targets well above the 1% rate threshold. The U.S. dollar is showing signs of a slowdown following a strong rally over the past few weeks. The dollar index has managed to breakout above the 100.00 psychological trading level and looks well supported above this level. Trader positioning could see some unwinding of dollar long positions into the FOMC meeting which offers a very short term trading opportunity.

On the one-hour chart, USDCHF has been consolidating after posting a high above 1.0206. If the near term weakness persists, USDCHF could be looking to a bearish close by Wednesday as long positions are un-winded. Therefore purchase daily PUTS below 1.0180 for a 21:00 GMT expiry time.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.