The USDCHF moved below the 200 hour moving average for the 1st time since April 12 during trading yesterday. There was an afternoon rally that took the price back up toward the low of a swing area between 0.9960 and 0.9974 (and above the 200 hour MA in the process for a brief moment), but the price closed the day back below the key MA barometer.
Today, the price low could not reach the low from yesterday, and sellers turned back to buyers.
The price rise on the buying saw the USDCHF move above the 200 hour moving average (green line) and above the aforementioned swing area. Traders tried to stay above that level in the London morning session and into the New York session. However, sellers cracked the price below the 200 hour moving average in the last hour or so, and momentum to the downside has increased.
The new low price for the day has now taken the USDCHF toward the 50% of the move up from the May low at 0.98862. Move below that level, and the low from last week at 0.9869 would be the next downside target as sellers continue the probe.
What should traders look for now?
Understand, that the 50% at 0.9886 is only of the May trading range. The USDCHF has had a much steeper run to the upside.
In my post yesterday I spoke of the 6 week run that has taken the price up from 0.91942 during the week of March 27, to the high price reached on Monday at 1.0063. That's a big move in a short period of time for the USDCHF. More momentum to the downside would have traders eyeing the 0.97838 to 0.9801 area (see green numbered circles).
On the topside, if the price cannot get below the 50%, the sellers are still not winning. A move back above 0.9900 and the 38.2% at 0.9928 would be eyed. If the 200 hour MA is rebroken, that would be a big failure by the sellers.
Helping to push the USD lower are lower rates. The 10 year yield is now down over 7 basis points. Meanwhile stocks are also getting hit with the Nasdaq now down -2.84%. That too is hurting the USD and sending flow of funds into the CHF (and the JPY as well as it trades to a new low).