Is it time for a correction?
The USDCHF has moved below the 100 hour MA on the current hourly bar. This development is not new today. Earlier in the European morning session, the price on the hourly chart fell below the 100 hour moving average (blue line in the chart below), and closed below the line for one bar. The next 3 bars traded below the moving average line, but none of those bars, could close below it.
The current bar has just close below this moving average line. The slope of the MA line is starting to turn lower. This is the 1st time since February 11. Is it time to expect a further correction in the USDCHF?
Below, the MA line, the lows over the last 3 days, come between 0.9464 and 0.9467. Needless to say a move below that area should solicit more selling momentum, with the upward sloping trend line at 9456 currently, as another target. Below that level,the 0.9441 is the 38.2% retracement of the move up from the February 17 low.
Looking at the daily chart, the USDCHF has stalled against the 100 day moving average (currently at 0.95373). The high price over the last week has come in at 0.95346. Also in that area are the lows from November and December 2014. . Those lows came in at 0.95312 and 0.95522. The inability to move above these levels suggests a strong ceiling is in place. On the daily chart the 0.9441 level is a low from October 29th. This corresponds with the 38.2% retracement on the hourly chart. Below that 0.9360 (October low) and the 200 day MA at the 0.9321 would likely limit any correction. .
Although the USDCHF has room to correct, the sledding might be tough to the downside. The SNB may not be intervening anymore, but they can exert pain on excessive CHF buying by cutting rates further. As a result, the market is likely to be cautious in selling the USDCHF too low. Treat shorts as trades, and look for breaks of the targets to confirm the markets acceptance, but do not be too surprised if support targets hold the line.
