Day 2: our USD/CHF trade

Yesterday I looked to buy USD/CHF at 0.9075, with a stop at 0.8965 and a potential target of 0.9210.

USD/CHF fell to a session low of 0.9064 yesterday, with traders seeing talks between John Boehner and the President break down and no real agreement in the Senate. The good thing here is the pullback fell to my suggested buy limit and thus achieved the fill.

As US trade rolled on, markets got quite excited that negotiations in the Senate were actually seeing strong progress and its seems likely that we will see a short-term solution announced soon. Reports are that we will see the government re-opened until January 15, while the debt ceiling will be extended until either February 7 or 15 (depending on which media reports you read). The can will be kicked into the New Year, and from here we will probably have the pain of watching new negotiations kick into gear. It is also worth pointing out that once we get a deal in the Senate, it will subsequently have to be passed through the Republican-controlled House, although it should pass.

USD/CHF has re-claimed the 91 handle and it will be interesting to see if we get a ‘buy the rumour, sell the fact’ type event play out, or whether traders continue to cover shorts in the USD. I suspect the latter.


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