The USDCHF is moving higher as yields move higher after the "good news" from the US initial jobless claims this morning (down to 223K from 250K last week). The CHF is also continuing to rid itself of the flight-to-safety flows into the CHF seen over the last month of trading as concerns about global growth, and lower stocks sent traders into "safe-mode" (and into the CHF - lower USDCHF).
With the good news from the services ISM data a few days ago, and the initial jobless claims today, the unwind is on.
Having said the move to the upside today, did run into some topside resistance:
- The 38.2% retracement of the move down from early July comes in at 0.86683
- The 200 hour moving average comes in at 0.86828.
The high price today stalled between those two levels at 0.8674 as traders leaned against the two technical levels. Risk can be defined and limited against that area. So selling against it - with a stop above - is a low-risk trading opportunity (PS see my video for more on the MAs and their importance by clicking here).
Earlier today at session lows, the price stopped near its 100 hour moving average (blue line on the chart below). That was a clue that support buyers were in play. They got the shove from the claims data. In
So buyers are making a play but if they are to take more control, they still need to get and stay above the aforementioned 38.2% retracement and the 200-hour moving average. If dollar bullish - and see more unwind of the CHF safety trade - getting above the 200-hour moving average would open the door for more upside momentum.
Conversely, risk-focused sellers probably want to stay below the high from yesterday at 0.8662. That would be the best-case scenario for sellers in the short term.
