Ahead of FOMC this evening FX markets are in waiting mode. As mentioned yesterday opening positions today is like tossing a coin. I will not do that and wait for tomorrow when the dust has settled.
Nevertheless I would like to have a quick look at the Swiss Franc. The currency had made a nice rally in recents weeks, especially against the Euro. That is astonishing with respect to the october risk-on mode with soaring american and european indices to ATHs nearly everywhere. The Swiss Franc belongs to the so called safe-haven currencies that should remain stable or increase in value in times of uncertainty. Therefore the october price action is not what you would expect usually.
EURCHF -- 1.0555
After the small relief rally in august/september the currency pair has resumed the downward trend which has started at 1.1152 (04mar21 hod). There is not much room left to the big 1.05 level now. That 1.05 support zone is seen as a key level where the SNB is expected to intervene against a further appreciation of the CHF. Hence trying to long EURCHF above 1.05 might be reasonable but 1.20 had been a reasonable level either. And we all do remember what happened on januar the 15th in 2015 when the SNB stopped to intervene.
USDCHF -- 0.9106
Although the Dollar-Index is trading well supported above 93.50 the currency pair cannot make progress to the upside. The 200 daily ma (0.9153) works well as resistance. The upward trendline starting from 07jan21 works as support for now. So the recent trading range is narrowing to around 70 pips and a break is coming very likely in the next 24 hours. For me the downside looks slightly weaker.
For both EURCHF and USDCHF I recommend to buy optionality - Straddle or Call/Put (hedged) instead of directional trades.
Good luck,
Sebbo