USDCHF trades to a new week high and moves closer to the 100 day MA

Technical Analysis

Author: Greg Michalowski | usdchf

Tests the 50% retracement of the move down from the November high.

The USDCHF is higher on the week. Not only that, it is higher for the second consecutive week as well  The move higher this week has taken the price from 0.9763 to a high today at 0.9821 (so far).  

Tests the 50% retracement of the move down from the November high.

Taking a look at the 4 hour chart above, the price has moved above two swing area at the 0.9761 to 0.9769 area and the 0.9788-948 area. Those area are home to swing lows and swing highs going back to mid December (see red and yellow shaded areas on the 4-hour chart above).  

Going forward traders who like the dollar/who like the upside, the higher (yellow) swing area is a risk defining level for buyers.  More conservative traders will look toward the lower red shaded area for support.  If each are broken, that would not be good for the buyers/longs. The gains this week would look more like a simple corrective move.

If the move higher this week is a corrective move - and if you like selling -  there are reasons for sellers to get ready to sell soon.  

The first is right around here near the 50% retracement.  The price is trading just above that level now. So I would recommend to wait a little to see if the wander above the 50% fails.

The next target above is probably a better level to consider selling.   At 0.98363 is the 100 day MA. I would expect sellers to lean against that level on the first test. The price has not traded above the 100 day moving average since December 9. That MA is also near some other swing highs going back to December at 0.96313.  

For now, however, the buyers are in control, but be aware that there are hurdles that bigger hurdles that lie ahead. 
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