USDCHF retraces gains into support swing area
The USDCHF moved sharply lower last week, falling from a high near 0.8130 to a low near 0.7950. The decline took the pair below its 100-hour moving average, the 50% retracement of the move up from the May low, and ultimately its 100-day moving average at 0.79757.
However, sellers were unable to sustain the downside momentum. The low stalled near the 61.8% retracement at 0.79519, and the price subsequently rebounded above the 100-day moving average. The pair ended the week near a key swing area between 0.8009 and 0.80178.
The recovery continued earlier today, with the USDCHF reaching a session high of 0.8042. However, the price rotated back to the downside during the European and early U.S. sessions and is currently trading near 0.8024 after reaching a low of 0.8018. That has brought the pair back toward the key 0.8009–0.80178 swing area.
What next?
This area remains a key barometer for buyers and sellers. The sellers had their shot below the zone last week and again at the start of this week, but they could not maintain the momentum. With the price now retesting the area from above, buyers have an opportunity to reassert control by holding support.
If the area holds, a rotation back toward 0.8049 would be the first upside target, followed by the 200-hour moving average at 0.80619. A move above that moving average would give buyers greater control and open the door for additional upside probing.
Conversely, a break below the 0.8009–0.80178 swing area—and then the 50% midpoint of the move up from the late-May low at 0.8000—would weaken the short-term technical picture. That would have traders looking back toward the 100-day moving average near 0.7975.
The battle lines are clearly defined: hold above 0.8000–0.80178 and buyers remain in the game; break below, and sellers regain control.
This article was written by Greg Michalowski at investinglive.com.