The USDCHF has been moving to the upside with 8 of the last 9 days moving higher (yesterday an 8 day run higher was broken). The high price yesterday reached 1.00493 which was at the bottom of the May extreme highs between 1.0049 and 1.00634. Sellers leaned, and post FOMC dollar selling pushed the price down into the close.
However support held against the rising 100 hour moving average in the late New York and early Asian session.
The dreams of a rebound back higher were quickly smashed after the SNB surprised the market with a 50 basis point hike. Rates are still negative at -0.25% but they launched ahead of the ECB (will hike in July) and the Bank of Japan (who are staying steady).
The price tumbled lower falling below target levels like a hot knife cuts through butter. There was some up and down stall above and below the 50% midpoint of the move up from the May 27 low at 0.9798, but the last few hours have seen a continuation an acceleration back to the downside. The current price is trading at 0.9695.
What now?
There is modest support against the current level, but it is hard to stop a freight train. Another target area would be the top of the consolidation extreme that was formed between May 23 and June 6. That area comes between 0.9658 at 0.9669. Move into that lower extreme, and we could ultimately see a full retracement of the bullish move higher seen in June (down to 0.95442).
What about a bounce?
The last swing area broken was between 0.9713 and 0.9723. That is close resistance followed by the 61.8% retracement at 0.9737. Above that and traders will be looking toward 0.9748 at 0.9763. I would not expect a move back above that area on a correction. If the sellers are serious about keeping control (see green numbered circles).
