The USDCHF corrected higher today and moved back up to test a key cluster of resistance defined by the:
- 100-day moving average at 0.8900 (lower blue line on the chart below)
- 50% midpoint of the move up from the July low at 0.88999, and the
- Swing area near 0.8900 (follow red horizontal line and note the support near that level going back in time).
The natural resistance at the round number(i.e. 0.8900) is also in play. The high price reached 0.88993 today.
The inability to get above that level keeps the sellers more in control. Going forward, if the buyers are to find comfort (and gain more control), they need to see the price back above that KEY level. If not, they are not winning technically.
Since holding resistance at 0.8900, the price has since rotated back down to a swing area below between 0.8851 and 0.8866. That area stalled the fall yesterday.
A break below would have traders looking toward the 61.8% retracement area of the move up from the July low near 0.8818.
This article was written by Greg Michalowski at www.forexlive.com. Source