USDCHF is working on its 2nd day of decline in 3 days. This comes after 9 consecutive days to the upside.
The pair fell sharply on Wednesday on selling dollars after the FOMC rate decision and Powell’s comments that a 75 basis point hike was not on the cards. Yesterday all of that reversed and the price rose for the 10th time in 11 days.
Yesterday the high price reached 0.98892. This came within 10 pips of the swing high dating back to March 2020, which stalled at 0.98994 (call it 0.9900). The sellers leaned ahead of the level (with stops likely on a break above).
Today the price rose to 0.9887 before reversing lower. Sellers continue to build on the March 20 high. The current price is trading at 0.9828. This is testing the lows of the day.
Based on the hourly chart, there are a number of swing lows at the 0.98278 level. A move below would cause traders to target the 100 hourly moving average (blue line in the chart below) at 0.97985 (and rising).
Below is the 200-hour moving average at 0.97423.
Just as there is a ceiling to yesterday’s and today’s highs, this week’s lows have stalled near a floor around 0.9713. Monday, Tuesday, Wednesday and Thursday lows ranged between 0.97086 (reached yesterday) and 0.97197 (reached Wednesday). The floor in this area between 0.97086 and 0.97197 will be an important area during a downward correction. Move lower and there could be further downward momentum after the sharp rise seen in April and early May.