(MENAFN- Daily Forex) The usd/chf rallied a bit during the trading session on Tuesday, showing signs of life as we broke above the 0.9250 level. However, we turned around to show signs of exhaustion again, so I think we got into a situation where we continue to struggle for footing. Nonetheless, we are in an area that I find very interesting, so I will be paying close attention to this pair.
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If we can break above the 0.93 level, then it's likely that we would go looking to the 50-Day ema , maybe even 0.95 handle. Ultimately, this is a market that is going to have to make a decision rather soon, as we are at a major support level going back ages. The 0.91 level has been important, just as a 0.90 level will be important from a psychological situation, and of course, the previous action in that area could come into the picture. It's worth noting that we had formed an expanding megaphone pattern, which is typically a pattern that people will see when we are about to perhaps change directions.Choppiness Ahead
The next couple of days will probably be very noisy, but it's certainly an area where I'd expect to see a lot of potential support, and with the Federal Reserve announcement coming on February 1, we could get a shock to the system. After all, a lot of people are suspecting that the federal reserve is going to loosen its monetary policy, and really slow things down. While it might slow things down, the reality is that the Federal Reserve has been screaming that they are going to keep rates very high, and it's possible we could head into a recession. This typically is good for the US dollar, because most people around the world will feel it as well, and therefore it's likely that we would see a lot of negativities around the world, and that typically has people buying US Treasuries going forward.
The market is likely to continue seeing a lot of noisy behavior, and that's probably the most important thing to pay attention to. You need to see some type of impulsive candlestick to really put money into the market, regardless of which direction it is. I think the next couple of weeks will probably be a lot of back-and-forth choppy behavior, so therefore keep in mind money management is going to be crucial.
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