The Euro has been noisy on Wednesday, as the EUR/CHF pair continues to be bullish, but we are a bit stretched heading into the Federal Reserve interest rate decision.
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EUR/CHF
The Euro has been quite noisy against the Swiss Franc during trading on Wednesday as we continue to see a lot of noisy behavior in general. That being said, this is a market that continues to pay close attention to the interest rate differential, but we may have gotten a little overbought. By doing so, a little bit of a pullback could present a potential opportunity, especially near the 0.93 level, an area that is a large, round, psychologically significant figure and an area that has been both support and resistance in the past.
Golden Cross and Interest Rate Differential Favor Buyers
The market is in the process of seeing the 50-day EMA break above the 200-day EMA, kicking off a so-called golden cross. I think at this point, you are still looking to buy dips if you get the opportunity. I don't have any interest in shorting this market, as the interest rate differential means that you are paying for the opportunity to short this market.
With that being the case, I look at this as a market that's about to offer quite a bit of opportunity, and in this environment, I'm more than willing to take advantage of it. I also recognize that some of the volatility might be due to the fact that we have an interest rate decision later in the day coming out of the United States, and that has a major influence on what happens next as well.
This might be simple position squaring ahead, and now that we are stretched like this, and we have uncertainty with a potentially volatile move coming, I think it makes sense that we are doing exactly what we are doing right here. I don't want to get too cute with this; I'll just let it come back to me and add to an already existing position that I've been in for a couple of months.