The USDCHF is down on the week, but finds support at the 38.2% retracement.

Yesterday’s look at the USDCHF, I wrote:

Downside targets that would increase the bearish bias would be near 0.9050 and then the 38.2% and swing level at 0.90209 (see green numbered circles). Getting below the 38.2% of the move up from the December low is key if the sellers are to show they want to take the price lower after the trend-run higher in December.

Against the downside getting out of control, are central bank policies. The SNB inflation is low and below target that keeps them in the dovish camp, while the Fed is more neutral now after a more dovish bias.

The price of the USDCHF did move lower today, and in the process, did find support buyers near the 38.2% at 0.90209. THe low price today reached 0.90265 before bouncing higher. Early buyers showed up.

The subsequent rise has now seen the price extend to the 100 hour MA. This week, the key MAs (the 100 and 200 hour MAs), have done a good job of putting a lid on the rallies. On Tuesday, the 100 hour MA stalled the rally. Yesterday, the 100 hour MA was broken, but sellers showed at the 200 hour MA (green line). So far today, the 100 hour MA is stalling the rally.

The MA will be a key barometer.

For the dip buyers near the 38.2%, you want to see that MA broken and then the 200 hour MA to show, and confirm the 38.2% correction “is it” for the pair.

For sellers here, you want to see another run to the 38.2% and see what happens there.

This article was written by Greg Michalowski at www.forexlive.com.