The USDCHF pair continues to experience choppy price action, with the current move testing a crucial downside target. After failing to break above the 38.2% retracement level of the decline from the mid-August high to the September low, the price has returned to the downside. The 38.2% retracement level was located at 0.85172, with the price reaching a high of 0.85143 before reversing today.
The downward move has brought the price to a key support level, defined by the convergence between the 100-bar moving average on the 4-hour chart and the 200-bar moving average, both of which are located near 0.8474.
This level is an important gauge for both buyers and sellers, and it represents the midpoint of the trading range that has been established since August 20.
I expect a break of the moving averages will open the door for a move towards 0.8459 and then 0.84315. The low for most bullish and bearish price movements is 0.83996.
On the upside, maintaining support and a career-long rally requires that we see the price move above 0.8500, and the 38.2% retracement at 0.85172. The 200-bar moving average on the 4-hour chart is at 0.8530, the highest level of most price action since mid-August at 0.85368.
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