Today, the USDCHF followed the USD lower in early Asian trading, and in the process fell back below the rising 100 hour MA and an upward sloping trend line as well.
The low price today got within 3 pips of the swing high from last Tuesday, but momentum could not be sustained. Buyers reentered and were ultimately successful in the running above, and away from its 100 hour moving average on the topside (blue line in the chart).
The high price today reached 0.98607 which was right at the high price from last Thursday's trade. Sellers leaned and the price has come back off over the last hour or so of trading. A ceiling has been est. against the highs seen over the last 4 trading days.
What now?
Admittedly, the price action has seen up and down above and below its 100 hour moving average. Nevertheless that moving average at 0.98028 represents a bias defining level worthy of following. Stay above is more bullish. Move below is more bearish.
If the sellers are to prevail with the potential ceiling in place, getting below that moving average would be Step 1. Step 2 would be to get below the 0.97614 level followed by the 38.2% retracement of the move up from the August 26 low. That level comes in at 0.97523.
The rising 200 hour moving average at 0.97425 is the next downside target that would be required to get and stay below if the sellers are to start to take back more control after the sharp run up from the August 11 low.
The move from the August 11 low, has seen the pair move up 493 pips in 19 trading days. During the run, there was one break below its 200 hour moving average. That was on the day of the Jackson Hole symposium and the US core PCE data. Initially the PCE came in weaker than expectations and the USDCHF fell briefly below the 200 hour MA. However, the same hourly bar saw a snap back rally and Chair Powell's comments solidfied the resumpition of the upward momentum. The last time the price closed an hourly bar below the 200 hour MA was way back on August 17.
For now, a potential ceiling is in place, with more work to the downside needed to increase the bearish bias starting with a re-break of the 100 hour MA. A move above the ceiling opens the door to a swing area on the daily chart between 0.9871 to 0.98908 (see red numbered circles and yellow area on the chart below).
