The USDCHF broke below the double bottom at 0.88591 from the April 13 and low from yesterday's trade. The low price reach 0.8851 but could not go any further. When the price started to trade more comfortably above 0.88662, the shorts got scared, and the price snapped back to the upside. Traders jumping on the break of a double bottom want to see momentum in the direction of the break. When it does not happen that opens the potential for the snapback rally. That is exactly what we've seen. I warned about this in the prior post.
The price is now approach the 100 hour moving average (blue line in the chart above). Also from the previous post, the price action in the Asian and early London session saw the price move above the 100 hour moving average on a number of hourly bars, but each break failed with limited momentum (kinda like the break below the double bottom). That failure(s) gave sellers the go-ahead to push lower (and they did).
So if the sellers had their shot below the double bottom, the buyers have also had their shot(s) above the 100 hour moving average (blue line).
What we know, however, is that at some point there will be a break and run.
On a push above the 100 hour moving average traders would like to see the price get above a swing level near 0.8921 to help confirm, and also the highs from yesterday and today at 0.8926.
The 200 hour moving average is also above at 0.89351. Ultimately getting above that moving average level - and staying above - is needed for the buyers to feel more comfortable and give them more control from a technical perspective
