Forex technical analysis: USDCHF the biggest mover today

Technical Analysis

Author: Greg Michalowski | usdchf

Trends lower after falling below floor area

The USDCHF is the weakest currency pair in trading today. It is down by 0.83% from the close yesterday. The low extended to 0.9772. The high was up at 0.9864. The price currently trades at 0.9780 - near the low for the day.

Technically, the pair fell below a floor area defined by swing levels (see red circled numbers). That area came in at 0.98335 to 0.09385.  Looking at the hourly chart above, the fall below that area was accompanied by increased downside momentum.  The price decline to the price to swing level going back to the end of November at 0.9775-778. As mentioned the low reached just below that area at 0.9772.

What now?  

Drilling to the five-minute chart below, the downside momentum started to pick up steam yesterday after a break below the converged 100 and 200 bar MAs (blue and green lines). The price corrected up to the 100 bar MA soon after that initial fall, held below the line and the selling was on.  

The price has been able to stay below the 100 bar MA since the break. That MA is currently at 0.9791 (and moving lower). Stay below that MA and the sellers remain in control.   Move above and the start of a corrective move off could see sellers turn to buyers. 

SUMMARY:  The USDCHF has been trending lower since late yesterday.  The cracked a swing level at 0.9833-38 but stalled at support on the hourly chart at 0.9775-78 area. It is not big support level, but it still is a level to get below to target the December low at 0.97348.  

If the support holds, it would potential lead to a bigger correction if the price can get back above the 100 bar MA on the 5-minute chart at 0.9791 currently. Get above it, and the sellers may look to lighten up/take profit. Stay below and sellers are still in full control.