On Tuesday, in my USDCHF post, I wrote:
“For sellers to strengthen their grip, they need to push below the swing support between 0.8060 and 0.8070, and then break the 38.2% retracement of the rally from the late-May low to last week’s high at 0.80491.”
In trading today, the pair tested that 0.8060–0.8070 support zone and found willing buyers. The low reached 0.8061 before rebounding sharply.
That recovery has now lifted the price back above the 100-hour moving average (blue line on the chart above), currently at 0.80878. Reclaiming that level shifts the short-term bias modestly back in favor of the buyers, although there is still work to do.
That next challenge comes at the swing resistance area between 0.8108 and 0.81195. The falling 200-hour moving average, currently near the top of that zone, adds another layer of resistance and increases the importance of that area. So far today, the rally has stalled at 0.8102, just short of those key targets.
From a technical perspective, the roadmap is fairly straightforward. As long as the price remains above the 100-hour moving average, buyers remain in control of the near-term bias. That moving average now serves as the key close-risk level for traders who bought near the 0.8060 support area or on the break back above the 100-hour moving average. A move back below it would weaken the bullish case and shift attention back toward the 0.8060–0.8070 support zone.
For the buyers, get above the swing area and 0.81195 in the falling 200 hour moving average at the same level, would open the door for further upside momentum with risk redefined against 0.8108.
This article was written by Greg Michalowski at investinglive.com.