USD/CHF dropped below a support zone that had held for more than two months, giving sellers control of the pair. U.S. Treasury buying and the subsequent selling of the U.S. dollar drove the move, and the pair now trades around a key pivot near 0.8000.
USD/CHF fell sharply this week, breaking below the value area that had contained most of its price action over the past two-plus months. The drop shifted technical control to sellers.
Pair breaks two swing areas
The price first broke below a swing area between 0.8029 and 0.8034, then pushed through another swing area at 0.8009 to 0.80178. Selling continued on Thursday with a break below the 100-day moving average.
Downside momentum then stalled near the 61.8% retracement at 0.79519. The pair touched a low of 0.7949 before buyers stepped in and pushed the price higher late in the session.
Broken support now caps the upside
In trading today, price action has turned choppier, but the broken swing area between 0.8009 and 0.80178 has held as resistance both yesterday and today. That makes the zone a key short-term barometer for buyers and sellers.
As long as the price stays below 0.80178, the bias favors sellers. The 0.8000 level is also in play, with the pair currently trading above and below it.
What comes next
A move back above 0.80178 would give buyers more confidence and shift focus toward the next swing area at 0.8029 to 0.8034. Staying below 0.80178, however, keeps sellers in control and puts the 100-day moving average at 0.79747 back in play. A break below that average, and the ability to hold below it, would increase the bearish bias and open the door to another run at this week's lows.
Source: Investinglive
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