USDCHF bounces off the 38.2% retracement level today. Why is that important?

The USDCHF moved lower to start the trading week but found willing sellers near a key swing area between 0.86078 and 0.8619. The low held on Tuesday ahead of the election results. Those results sent the pair moving sharply higher.

The run higher, extended back above the 100-day MA at 0.8667. It moved above the 38.2% of the move down from the May 2024 high at 0.86983 (more on that later), and did not stall until reaching near a swing level at 0.8776. The high price reached 0.8774 and stalled.

The subsequent move lower yesterday and into today moved down to a low at 0.8700 which is a nice natural support level and also 2 pips from the broken 38.2% at 0.86983.

Holding that retracement shows the buyers are serious about the upside, and the price has moved higher as a result today.

The price is currently trading at 0.8761 and looks toward the next target at 0.87763 followed by the 50% of the same move lower and the 200-day MA at 0.8816. That MA is within a swing level up to 0.8825.

Those are the next key upside targets. Get and stay above the 200-day MA/swing area and the door opens for more upside momentum.

What will hurt the bullish bias next week?

A move back below the high from last week at 0.8710 and then the 38.2% at 0.8698 would be needed to hurt the buyers looking for more upside.

Absent that, and there could be some overhead congestion (50% and 200-day MA at 0.8798 and 0.8817 respectively), but the buyers are still more in control.

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USDCHF Update

Key Points

1. USDCHF found support at 0.86078-0.8619 swing area.

2. Election results sparked sharp rally above 100-day MA (0.8667).

3. Reached 0.8774, stalled, then pulled back to 0.8700 support.

Trading Bias

• Bullish: Holding above 0.86983 (38.2% retracement).

• Bearish: Breaking below 0.8698 and 0.8710.

Key Levels

Resistance:

• 0.87763

• 0.8816 (50% retracement, 200-day MA)

• 0.8825 (swing level)

Support:

• 0.8700

• 0.86983 (38.2% retracement)

• 0.86078-0.8619 (swing area)

Outlook

Buyers in control, targeting 0.87763 and 0.8816. Break below 0.8698 and 0.8710 would weaken bullish bias.

Upside Momentum

Get and stay above 200-day MA/swing area (0.8816-0.8825) for continued upside momentum.

This article was written by Greg Michalowski at www.forexlive.com.