The USDCHF is displaying bullish momentum after key technical levels were tested this week. A breach of the 200-hour moving average signifies increasing bullish sentiment, with buyers targeting the 38.2% Fibonacci retracement level at 0.88637.
The pair found support after bottoming at 0.87575 on Monday, with successive lows established at 0.8772 and 0.8794. The break above the 200-hour moving average today further reinforces bullish prospects, while support at the 200-day moving average establishes a reliable technical floor.
Key Resistance Levels
If momentum continues above 0.88637, the next target is the 50% retracement at 0.88965. However, failure to maintain above the 200-hour MA could reignite selling pressure, shifting focus back towards lower levels.
While the longer-term outlook still leans towards sellers, recent movements indicate a potential shift, making the 0.88637 level critical for future direction.
Although short-term sentiment appears tilted towards buyers, the broader trend has yet to fully confirm a sustained reversal. The area around 0.88637 remains pivotal, where a proper breakthrough could encourage further buying interest towards 0.88965. If this level does not hold, enthusiasm among buyers may wane, giving room for sellers to regain momentum.
The 200-hour moving average now acts as a fulcrum. Holding above it suggests that buyers are still determined to push prices higher. If prices drop below this threshold once again, it would indicate that recent gains lacked the strength to shift the broader sentiment. Market participants should take note of how price behaves around this technical reference in the coming sessions.
Short Term Buyers Strength
What we have observed this week is a clear bounce from 0.87575, with higher lows forming at 0.8772 and 0.8794. This demonstrates that buyers have built some control over short-term movements. The fact that the 200-day moving average remains intact as support only adds weight to this notion. Until this support is meaningfully broken, downside risk remains moderated.
Even though the broader outlook still favours the selling side, recent developments suggest sentiment may not be as one-sided as before. Buyers have now shown enough resilience for a proper test of 0.88637 to be warranted. If prices hesitate around this level, or buyers struggle to break through with conviction, movement could falter, leaving room for renewed pressure from sellers.
Watching momentum in the coming sessions will be key. The reaction around the retracement levels will help determine whether buyers can further assert control or if recent gains begin to stall. Any sudden loss of traction above key areas could indicate that the stronger trend remains intact, which would turn attention back towards previously established support levels.
