The USDCHF trended higher for most of June, with only a modest correction around mid-month that saw the pair test its 200-day moving average before turning back to the upside. The rally gained momentum following the June 17 FOMC rate decision, which helped propel the pair from around 0.7909 to a high of 0.81389 last Wednesday.
Since reaching that peak, the pair has corrected lower and slipped back below its 100-hour moving average, currently at 0.8103. However, Friday’s decline found willing buyers just ahead of the rising 200-hour moving average, which now comes in at 0.8071.. The price bounced back higher into the close on Friday but was able to stay below its 100 hour moving average.
In trading today, the early Asian session rebound retested that 100-hour moving average and once again attracted sellers. The move lower now has the pair currently trading near 0.8088, sandwiched between the 100-hour and 200-hour moving averages. Technically, that leaves the short-term bias neutral, with traders looking for a break in either direction to provide the next clue.
The rejection near the 100-hour moving average gives sellers an opportunity to wrest back some control from the June uptrend. To strengthen the bearish case, however, they need to push and hold the price below the rising 200-hour moving average.
On a move below that level, the next downside target comes at the 38.2% retracement of the latest rally at 0.8051. A break below there would shift focus toward the 50% retracement at 0.8024, followed by a key swing area between 0.8009 and 0.8018—the former resistance zone that gave way following the FOMC decision.
On the topside, a move back above the 100-hour moving average would put buyers back in control and open the door for another run toward last week’s highs.
This article was written by Greg Michalowski at investinglive.com.
