In the video and post yesterday, I spoke of the support target between 0.8818 and 0.8825 (see: “USDCHF breaks lower below technical levels, increasing the bearish bias. What next?“). In that post (and in the video), I wrote
- On the downside, the next target area comes between 0.8818 and 0.8825. Below that is the 50% midpoint of the same move higher from the December 2023 low. That level comes in at 0.8777.
In trading today, the low bottomed at 0.8819, and subsequently after an initial bounce higher, the higher 0.08825 level as tested with buyers leaning once again. That gave buyers confidence the price bottom was in, and the price has indeed moved modestly higher.
What next?
If the low is in place, moving back toward the 200-day MA, and the broken 38.2% of the move up from the December 2023 low cannot be ruled out (among other technical levels near that area). That level comes in at 0.8883. The high just reached 0.8851. Yesterday, those levels were broken opening the downside to more selling momentum.
Having said that, I would expect that if that area is tested (or neared), that sellers would lean and look to keep a lid on the price action ahead of that level. However, if rebroken, that would certainly disappoint the sellers from yesterday.
The question is “Can the bounce even get up to that level?”
For dip buyers, risk is defined at the 0.8818. Move below, and the selling should restart with 0.8777 the next key target (50% of the move up from December).
This article was written by Greg Michalowski at www.forexlive.com. Source