USDCHF - the risk vs reward trade off this week

3월 19일

Put USDCHF on the radar - while there are many different ways this could play out this week, here are 2 clear scenario's that are front of mind.

Upside - the fed's 2024 dot moves higher in tomorrows FOMC meeting to show 2 cuts (from 3). We could also see the SNB cut rates - this is a non-consensus call with 4/24 economists calling for a 25bp cut (to 1.5%) and the Swiss swaps market pricing this outcome with 30% chance

Downside to price - the Fed leave the 2024 dot unchanged at 3 cuts, and we see 2024 GDP median estimate upgraded to 1.8% (from 1.4%), and the SNB leave rates unchanged

Risk vs reward - If the upside scenario plays out then price will likely have a far bigger move to the upside, than potential downside if scenario 2 plays out.

The daily chart looks ominously poised to breakout - momentum and trend traders will be watching to see if this triggers a move that has some duration.