CME FedWatch Index Says March Rate Hike A Slam-Dunk

Next Wednesday marks the first meeting of the U.S. Federal Reserve (FED) under new Chairman Jerome Powell. Powell made waves a few weeks back with his Congressional testimony regarding the current state of the U.S. economy. At this hour, it appears that the Jerome Powell era at the FED is going kick off with a bang.

The odds of a March 21 rate hike are high. As of this morning, the CME FedWatch index has assigned a 94% chance to the FED raising its target rate by 25 BPS. The markets are responding in step, led by a bull run in the USD/CHF.

USD/CHF Technicals

Well, so much for a trade war. The coming policy move by the FED is likely the first of four that are to transpire during 2018. As a result, the USD/CHF is banging higher on the dollar’s new found glory.

Here are the key levels to watch for the remainder of the session:

• Resistance(1): Swing High, .9534
• Support(1): Psyche Level, .9500
• Bollinger MP(1): .9433

Overview: The price action in the Swissie is not surprising. This market is still well below last fall’s visit to par and there is plenty of room to the upside. As of this writing, bulls are pushing the intraday top above the Swing High of .9534. The next stops are likely to be the .9550 and .9600 handles.

Getting in the way of a trending Swissie is rarely a good idea. But, early next week should give us a shot to sell from a macro topside resistance level. If the setup develops properly, I will be sure to pass it along in a Monday live market update.