In yesterday’s post and video, I highlighted the importance of the swing area between 0.8138 and 0.81513, writing:
“Ultimately, if buyers are going to take firmer control, they need to get and stay above 0.8151. A sustained break above that level would strengthen the bullish bias and have traders looking toward the July swing highs near 0.8206.”
That break never materialized.
The USDCHF reached a late-session high yesterday of 0.8146, just below the upper end of that key swing area. In the new trading day, buyers made another attempt, but the price stalled at 0.8145 before rotating back to the downside.
The selling pressure has intensified over the last few hours, helped by broader U.S. dollar weakness. Technically, the decline has taken the USDCHF below its 100-hour moving average at 0.81185 and down to test the 200-hour moving average at 0.81049. The low has reached 0.8104, just below that moving average, before bouncing modestly. The pair currently trades around 0.8108.
That puts the focus squarely on the 100- and 200-hour moving averages heading into the weekend.
On the topside, a move back above the 100-hour moving average at 0.81185 would give buyers some breathing room and increase the potential for another run toward the 0.8138–0.81513 swing area. However, as long as the price remains below the 100-hour MA, sellers maintain the stronger short-term technical hand.
On the downside, the 200-hour moving average at 0.81049 is the immediate battleground. A sustained break below that level would increase the bearish bias and target Wednesday’s low near 0.8092. Below there, attention would shift toward the 0.8060–0.8070 swing area, followed by the 38.2% retracement at 0.8049.
A break below those levels would put the lower end of the broader two-month value area near 0.8029 back in play. That level has helped define the bottom of the wider 0.8029–0.81513 trading range.
For now, the battle lines are clearly defined. The 200-hour moving average is the key downside barometer, while the 100-hour moving average is the level buyers need to reclaim. How the price behaves between those two technical levels should determine who carries the stronger hand into the weekend.
This article was written by Greg Michalowski at investinglive.com.