Forex Trading: USD/CHF Moves Sharply Higher

The USD/CHF was able to use the 200 hour moving average and 50% retracement level of the last move down as a spring board in London hours (at the 1.0750 level).  The momentum was enough to move the pair above the 200 day MA today at the 1.0860 level.  The combination led to sharp moves higher in the pair in a short period of time (see chart above).

The pair reached a high for the day at the 1.1119 level.  The 38.2% retracement level of the move down from the November high of 1.2297 to the December low of 1.0368 comes in at 1.1105.  This level was broken on the move higher but quickly ran into selling which pushed the pair back below the key level as profit taking from the sharp move ensued.  The level will be a key level today and will propel the market higher if the level can be broken.

For the time being, the action will most likely be choppy and consolidative.  On the down side, the 1.0983 will be watched.  This was the low price after the sharp move higher.  A break of this level should solicit additonal short term profit taking in the pair.  A break above the 1.1105 level would look toward the 50% retracement level and the 100 day MA which come in at the  1.1330 to 1.1370 level.

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