The USDCHF this week extended above a swing area between 0.86078 and 0.8619, and then the 38.2% retracement of the move down from the July high to the September low at 0.86318.
Yesterday there was a corrective move that took the price briefly below the 38.2% retracement, but only by a few pips before the market snapped back higher. Since then the price has moved back toward the high price from yesterday’s trade near 0.8669.
If the price can stay above the 38.2% retracement at 0.86318, the bias remains more to the upside. The next key target area comes against its 100-day moving average at 0.8704 and the 50% midpoint of the move down from the July high at 0.87116. That area should provide some solid resistance on a test but is the next he upside target if the price can stay above the 38.2% retracement level.
Conversely, if the 38.2% retracement is broken, I would expect buyers to turn to sellers on the failure of the move above the key retracement level.
For the EURCHF, yesterday the pair moved down in reaction to the ECB rate cut. That move took the price to a key upward-sloping trendline and also the 61.8% of the range since August. Those levels are between 0.9351 and 0.9353. The price bounced off of that level. Sellers turned to buyers against the key technical target.
In trading today, the price has stretched back toward a cluster of technical levels including the 50% midpoint of the same range at 0.93949, the 100-bar moving average on the 4-hour chart at 0.9398, and the 200-bar moving average on the 4-hour chart at 0.9401. If the price can get above those moving averages and stay above, it would shift the bias more in favor of the buyers.
This article was written by Greg Michalowski at www.forexlive.com.
Leave a comment