Yesterday, the USD/CHF pair rose and found support at the 200-day moving average early in the day, which turned the bias to the upside. It rose above the 38.2% retracement level of the recent move lower at 0.89072, extending to a high of 0.8923 before slowing at the close.
But today, the price fell back below this correction level. Later, as it moved below the 200-day moving average, sellers intensified their efforts, pushing the price down towards last week’s lows and mid-June lows. This area, between 0.8819 and 0.8825, has been a major swing level since February and March. Today’s low was 0.8828, just above this range. The price is currently trading at 0.8854.
Looking ahead, resistance remains near the 200-day moving average at 0.8883, while support lies at 0.8819. With the price currently between these levels, buyers and sellers are likely to engage in a battle, waiting for the next breakout, whether higher or lower.
Did you know that the 200-day moving average is often used by traders to identify long-term trends and potential reversal points? It acts as a risk-focused level (traders can buy and sell around the level that limits risk) and is therefore closely watched by market participants around the world. This gives traders the opportunity to trade away from this key technical level.