USDCHF dips but finds support, signaling potential reversal

Yesterday, the USDCHF experienced an upward movement, reaching a key swing area between 0.8711 and 0.87314. The pair initially moved away from the 38.2% retracement level of the downward trend from the October high to the December low, which is at 0.86803. Despite this, the market couldn’t maintain its upward momentum. When the price subsequently fell below this retracement level, it indicated a shift in the balance between buyers and sellers.

The price decline continued, breaking through another swing area between 0.8630 and 0.8650, eventually reaching down to retest the 200-bar moving average on the 4-hour chart, which is currently at 0.86027. Since then, the USDCHF has been oscillating between the 0.8650 swing area and the 200-bar moving average.

As we enter the new trading day, this range will be critical for determining the market’s direction. A break below the 200-bar moving average and the rising 100-bar moving average at 0.85726 could signal further downward movement. On the flip side, if the price moves above 0.86504, the focus shifts to the 38.2% retracement at 0.8680, followed by a potential retest of the previously tested swing area up to 0.87314. This area serves as a pivotal zone for buyers and sellers, with these levels acting as key indicators for future price movements.

This article was written by Greg Michalowski at Source