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Home ANALYSIS

USDCHF retests 100 hour MA as the price corrects off of highest levels since April 2021

A.R Chowdhury by A.R Chowdhury
March 17, 2022
Reading Time: 5 mins read
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USDCHF retests 100 hour MA as the price corrects off of highest levels since April 2021

USDCHF

USDCHF test its 100 hour moving average

The  USDCHF 
USD/CHF

The USD/CHF is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Swiss franc of Switzerland (code CHF). The pair’s exchange rate indicates how many Swiss francs are needed in order to purchase one US dollar. For example, when the USD/CHF is trading at 1.2500, it means 1 US dollar is equivalent to 1.25 Swiss francs. The US Dollar (USD) is the world’s most traded currency, whilst the Swiss franc (CHF) is the world’s sixth most traded currency, resulting in a very liquid pair, with tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Even though the Swiss franc might not be as liquid as the euro or yen, the USD/CHF currency pair is still liquid enough to be known as the fourth major. Trading the USD/CHF has its advantages and disadvantages. The main advantage being, a lot of traders often prefer to invest in the Swiss franc when economic or political instability is lurking.This is due to Switzerland traditionally being known as a safe haven, as it generally remains neutral and silent on many major geopolitical events, for example it never participates in wars. These investments can trigger large swings for traders, who may capitalize on such moves. The main disadvantage is that the US dollar is the world’s reserve currency.Thus, traders also can flock to the USD, trying to ascertain which currency is more likely to be embarked upon can prove tough at times. USD/CHF Still Living in Shadows of 2015The USD/CHF otherwise is seen as one of the lesser volatile pairs, with a tendency to follow the Euro, hence the negative correlation between it and the EUR/USD.The currency pair will forever be tethered to the events of January 2015 with the Swiss National Bank (SNB) Crisis which roiled currency markets.In this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets.

The USD/CHF is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Swiss franc of Switzerland (code CHF). The pair’s exchange rate indicates how many Swiss francs are needed in order to purchase one US dollar. For example, when the USD/CHF is trading at 1.2500, it means 1 US dollar is equivalent to 1.25 Swiss francs. The US Dollar (USD) is the world’s most traded currency, whilst the Swiss franc (CHF) is the world’s sixth most traded currency, resulting in a very liquid pair, with tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Even though the Swiss franc might not be as liquid as the euro or yen, the USD/CHF currency pair is still liquid enough to be known as the fourth major. Trading the USD/CHF has its advantages and disadvantages. The main advantage being, a lot of traders often prefer to invest in the Swiss franc when economic or political instability is lurking.This is due to Switzerland traditionally being known as a safe haven, as it generally remains neutral and silent on many major geopolitical events, for example it never participates in wars. These investments can trigger large swings for traders, who may capitalize on such moves. The main disadvantage is that the US dollar is the world’s reserve currency.Thus, traders also can flock to the USD, trying to ascertain which currency is more likely to be embarked upon can prove tough at times. USD/CHF Still Living in Shadows of 2015The USD/CHF otherwise is seen as one of the lesser volatile pairs, with a tendency to follow the Euro, hence the negative correlation between it and the EUR/USD.The currency pair will forever be tethered to the events of January 2015 with the Swiss National Bank (SNB) Crisis which roiled currency markets.In this instance, the SNB abruptly decided to abandon the Swiss franc (CHF) currency peg with the euro, convulsing markets.
Read this Term
has moved to a new session low and in the process is testing its 100 hour moving average at 0.93836.

Back on March 10, the price also tested that moving average line only to find willing buyers. Of course the moving average was much lower at that time at 0.92529. Since then the price moved up to a high yesterday at 0.9459 (up 230 pips in four trading days), before giving up those gains and closing lower yesterday. A move below the 100 hour moving average would have traders targeting the swing highs and lows from Monday and Tuesday’s trade between 0.93628 and 0.93709. Break below that level and the 38.2% retracement at 0.9341 then the rising 200 hour moving average at 0.93305 would be other downside targets that would increase the sellers confidence on breaks.

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Taking a broader look at the daily chart below, the price higher yesterday fell about 13 pips short of the April 2021 high price of 0.9472 (that was the highest level in 2021 as well). The level gave sellers to lean against on the spike higher after the FOMC decision. Holding it, also gives sellers the start of some confidence.

Staying on the daily chart, there is a swing area between 0.9365 and 0.93748 that if the 100 hour moving averages broken, would be another target to get to and through on the downside to give sellers even more confidence. Those levels corresponded with similar levels on the hourly chart above.

USDCHF

USDCHF falls away from 2021 high and looks toward swing area
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A.R Chowdhury

A.R Chowdhury

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