Yesterday, the USDCHF moved higher and found support at the 200-day moving average early in the day, shifting the bias to the upside. It climbed above the 38.2% retracement level of the last move lower at 0.89072, extending to a high of 0.8923 before slowing into the close.
Today, however, the price fell back below that retracement level. Later, as it moved under the 200-day moving average, sellers intensified their efforts, pushing the price down toward last week’s lows and the mid-June low. This area, between 0.8819 and 0.8825, has been a significant swing level since February and March. The day’s low reached 0.8828, just above this range. Currently, the price trades at 0.8854.
Looking ahead, resistance remains near the 200-day moving average at 0.8883, while support is at 0.8819. With the price currently positioned between these levels, buyers and sellers are likely to engage in a battle, waiting for the next breakout, whether higher or lower.
Did you know that the 200-day moving average is often used by traders to identify long-term trends and potential reversal points? It acts as a risk focused level (traders can buy and sell around the level limiting risk) and as such, is closely watched by market participants around the world. The gives traders the opportunity to trade the moves away from that key technical level.
This article was written by Greg Michalowski at www.forexlive.com.
