Technical levels taken out one-by-one
The USDCHF continues to recover the losses from that fateful day back in January when the SNB de-pegged the EURCHF and all hell broke loose.
The pair today moved above what was the next target on the topside. That target was the "broken" trend line that connected the August 2014 low to the December 2014 low. That line came in at 0.9905 today. The price had no trouble moving through that level and staying above in trading today (see blue circle 6 in the chart below).
In the course of the recovery higher over the last 3 or so weeks, the USDCHF has been able to take out a succession of resistance targets, with little trouble. They included:.
- The 200 day moving average (green line in the chart above at 1),
- The next hurdles were clustered against the lows from November and December 2015, and the 100 day moving average (blue line in the chart above). Those levels were broken at the beginning of March (see blue circles 2 and 3 in the chart above),
- The high from November at the 0.97408 level (blue circle 4),.
- A swing high from December at 0.98168,
- The trend line today (blue circle 6)
The high price today stalled against the 1.0000 level (the high reached 0.99985).
Should the trend continue higher (and there is little in the way or resistance), the next targets will be the following:
- An old gap from January 2/January 5 between 1.0013 and 1.0032.
- Finally, the 1.0239 high would take the price to the highest level since 2010.
What is risk now for the buyers?
Looking at the hourly chart below, the price has been using the lower channel trend line for support. That trend line currently comes in at 0.9923 and represents risk for longs/buyers (the line is moving higher by about 3 pips per hour).
Above, the 1.0030 level is currently the channel trend line (also moving up by 3 pips per hour).
The price is currently trading between the two extremes.
Look for the trend to continue as long as the support trend line can hold below. ON tests of the topside trend line, there may be some selling as risk can be defined and limited against that line. The US dollar remains king, and that should continue to keep the USDCHF moving higher.
