The USDCHF continues to experience volatile price action, with the current move testing a crucial downside target. After failing to break above the 38.2% retracement level of the decline from the mid-August high to the September low, the price has rotated back to the downside. The 38.2% retracement level was situated at 0.85172, with the high price reaching 0.85143 before reversing today.
The downward move has brought the price to a key support level, defined by the convergence of the 100-bar moving average on the 4-hour chart and the 200-hour moving average, both of which are situated near 0.8474.
This level serves as a critical barometer for both buyers and sellers, as it also marks the midpoint of the trading range established since August 20.
I would expect if the MAs are broken, it would open the door for a move toward 0.8459 and then 0.84315. The low of most of the up and down price action comes in at 0.83996.
On the topside, holding support and bouncing career would need to see the price move above and 0.8500, and the 38.2% retracement at 0.85172. The falling 200 bar moving average and the four hour chart is at 0.8530 in the high of most of the price action going back to mid-August comes in at 0.85368.
This article was written by Greg Michalowski at www.forexlive.com.