Forex Trading: USD/CHF Testing The 100-Hour Moving Average

The USD/CHF is testing the 100 hour moving average at the 1.2043 level. However, the pair is largely in a consolidating pattern after hitting a high on November 21st at the 1.2287 level.  Since the high, the pair corrected sharply - moving below the 100 hour moving average in a convincing fashion.  The downside momentum was not maintained, however, and the ideas of a larger correction lower was denied.

Now the pair has found resistance shor to of the high levels and moved lower.  As a result, the likelihood is in for a period of consolidation (i.e. non trending)

The moving averages are confirming this notion.  The 100 and 200 hour moving averages are converging with the 100 hour moving average at the 1.2044 level and rising (blue line) and the 200 hour moving average at the 1.2067 level and declining (green line).

Intraday there is support at the 1.2019 level (lows from yesterday), and below that at 1.1954.  On the upside, the resistance comes in at the 1.2142 and 1.2199.

In economic news out of Switzerland, CPI inflation for the month came out at a lower than expected 1.5% YoY (vs. 2.0%e and down from 2.6%) and down 0.7% for the MoM.  The inflation surge continues to be sucked out of the global economies.  This trend is likely to continue and could move from disinflation to deflation at some point. As a result, pressures to inflate via monetary and fiscal measures are likely to continue given the global economic backdrop.

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