Takeaway

The presenter argues that the Dollar Swiss Franc (USD/CHF) has confirmed a significant bullish breakout, fueled by revised, more hawkish projections from the Federal Reserve. The key action is the pair breaking and holding above the 0.82-0.8214 resistance zone, which the speaker believes opens the door for further upside towards targets starting at 0.8260.

What the presenter said

• Dollar Swiss on the weekly chart is breaking a major resistance level between 0.82 and 0.8214. [00:17]
• This is the fourth consecutive weekly rally, with the pair now up approximately 3.9% from its August lows. [00:40, 00:48]
• The presenter states that stabilization above the 0.82 level is needed to keep the uptrend in play. [00:55]
• Daily momentum (RSI) is attempting to close above 70 for the first time since June, indicating strengthening momentum. [01:44]
• The move is supported by the Fed, which increased growth prospects, upwardly revised its unemployment outlook to 4.1%, and saw an uptick in PCE inflation. [03:35]
• The median Fed funds rate projection was raised from 3.8% to 4.1%, with markets now largely expecting another 25 bps hike by year-end. [03:55, 04:37]
• Upcoming data includes US PMI figures on Wednesday and the Swiss National Bank (SNB) rate decision on Thursday. [05:03]

Trade ideas

• Instrument: Dollar Swiss Franc (USD/CHF)
• Direction: Long
• Entry: Above 0.82
• Target: 0.8260, 0.8333, and 0.8375-0.8387
• Stop: Below 0.8155-0.8156
• Horizon: Short-term
• Conviction: High

Levels and data cited

Price Levels (USD/CHF): * Resistance/Support: 0.82 - 0.8214 (described as a major level, now support) * Targets: 0.8260, 0.8333, 0.8375-0.8387 * Bullish Invalidation: 0.8155 - 0.8156 (this month's opening range high)

Data Cited: * Federal Reserve: Increased growth prospects, upwardly revised unemployment outlook to 4.1%, saw an uptick in PCE, and moved the median Fed funds rate projection to 4.1%. * Fed fund futures: Imply just below a 50% chance of a hike in October and largely expect a 25 bps hike by December. * Upcoming data: S&P Global Services and Manufacturing PMI (next Wednesday); SNB rate decision (next Thursday).

Risks and what would invalidate this

• A break below the 0.8155-0.8156 level would invalidate the bullish breakout thesis.
• The presenter notes that for the pair to be heading higher, any losses should be limited by the 25% parallel (a technical indicator not quantified further).
• The speaker mentioned the political question of the Fed hiking rates just ahead of midterms.