USDCHF breaks higher today but does find willing sellers against target swing area.

The USDCHF moved above it’s 200-hour moving average (green line in the chart below) in the Asian session, and then worked its way toward the next target defined by a swing area between 0.8982 and 0.9000 (the 200-day moving averages also in play at 0.9008). Sellers leaned against the 0.9000 level and pushed the price back down. However, support buyers came in against its 200-hour moving average again at 0.89608, and moved the price back to the upside.

Currently, the price is back between the aforementioned swing area. It would take a move above (and stay above) the 0.9000 level and the 200-day moving average at 0.9008 level to increase a bullish bias.

So traders are trading the technicals (I outlined these levels in my post yesterday). When technical support and resistance define ranges for traders (they are leaning), traders use those levels to their advantage. Sellers on rallies, use the high resistance as a “lean” level, with stops on a break above. Buyers use the low support as a “lean” level, with stops on break below.

Traders looking for more upside, want to see a break and run above resistance (i.e., breakout).

Traders looking for more downside want to see a break and run below the support (i.e. breakout).

This article was written by Greg Michalowski at Source