After yesterday’s US Consumer Price Index was released, the USD/CHF currency pair experienced a sharp decline, dropping past its 200-hour moving average, shown as the green line on the chart at approximately 0.9119. Despite this descent, the momentum didn’t last, leading to a swift recovery where the price climbed back above the 200-hour moving average before reaching the 100-hour moving average, illustrated by the blue line on the hourly chart.
Traders took a stance at the 100-hour moving average, effectively capping the pair’s upward movement. Recently in the US trading session, another fall below the 200-hour moving average resulted in setting new lows for the day.
At this point, the sellers are taking advantage. To tilt short-term momentum in favor of the sellers, it’s crucial for the price to remain below the 200-hour moving average of 0.9119. If this remains the case, we could see a retest of the previous day’s low along with targeting the rising 100-bar moving average on the 4-hour chart, sitting at 0.9077. Should the price breach this level, traders may begin eyeing the 38.2% Fibonacci retracement of the upswing from December’s low, which is positioned at 0.90209. It’s likely that we would see considerable buying interest at this level during any tests.
Conversely, if the price makes its way back above the 200-hour moving average, this could disappoint sellers, prompting traders to look again towards the 100-hour moving average at 0.91429. Surpassing this point could steer focus toward the week’s earlier highs around 0.9200, presenting a significant target.
