Risk is high for this pair....
The USDCHF fell below the 200 day MA in trading today at the 0.99167 level and fell to a low of 0.9881. The price has recovered higher and just moved back up to test that 200 day MA level. Key test for the bulls and the bears.
The last tests of the 200 day MA stalled the fall. Falling below SHOULD give sellers the advantage but that depends on the things like risk events. The CHF tends to be a safe haven currency and gold going up and bond yields moving lower, the CHF can also be a place to park funds. The terrorist action in London is a contributor to the strength today.
Will it last though?
It is impossible to predict the next time someone drives a car into a crowd under the guise of a terrorist attack. So traders cannot predict that...We cannot expect one tomorrow or the next day or week.
The Trump healthcare vote scheduled for tomorrow will be another event that can turn markets around. The stock markets decline yesterday was partly/largely based on fears that there may not be enough votes to repeal Obamacare. According to tallies, 20 House Republicans has said they will vote "No" while 4 have said they will "likely oppose it". Trump can only afford 21 defections from the Republican party (assuming all Democrats vote "No"). Trump, VP Pence and Ryan are lobbying the No's and maybe's hard.
If it is a "No" that would not be good for stocks or the confidence in the Trump presidency. That should weigh on the pair.
So although the 200 day MA is a key level, risks will be high for this pair over the next day or so. The price moving toward the middle of the 7 month trading range at 0.9945 and the 200 day MA at 0.99167 is not all that surprising. The market likes to get to neutral levels when there is a key risk event.
Can you trade above and below the MA line?
Sure, but if you do, understand there exists the potential for headlines of key votes between now and then that can be market moving. If one or two "no" votes are turned around that could give traders some relief and the USDCHF should rally.
If on the other hand there is no progress, and the vote gets delayed or they vote it down, the pair should tumble lower.
Technically, on a move back above the MA line, watch the 0.9945 level (50%) up to 0.9955. That is the high form back in May 2016. There should be sellers near that level on a move back higher.
On the downside, I would expect that the lows from the year at 0.9860 and the 61.8% at 0.9852 should attract buyers.