The USDCHF had been confined in a range within a range (see red boxes on the chart above). The price moved outside the first box at 0.8794 and then got to the low of the 2nd box at 0.8755. There was some stall near that area in the Asian-Pacific session, but then broke lower and the sellers dived in.
The price momentum has now pushed the price of the USDCHF to new lows – reaching a low at 0.8555. The price is just off those lows as selling intensifies. The move today has the USDCHF now down -2.86%. That is the largest move of the major currencies vs the USD.
That is the past. What now?
Looking at the 4-hour chart, the pair has now reached a swing area between 0.85309 and 0.85573. That area was defined going back to August through October 2024 during a consolidation phase near the lows from 2024. It is the high of that consolidation phase.
With the price down -2.86%, will the buyers take profit against this level?
At the least from a trader perspective, risk can be defined and limited. That would be the reason for buying either from a profit takers perspective or from a trader willing to take a punt.
If traders do buy, the topside resistance would be at 0.8607 to 0.8619 (green number circles on the chart below). A move above that would be needed to take some of the trend selling pressure off the market. Absent that, and the sellers are still in firm control.
This article was written by Greg Michalowski at www.forexlive.com.