USD/CHF fell sharply this week, driven by a fundamental catalyst: buying of U.S. Treasuries and the subsequent selling of the U.S. dollar. The decline pushed the pair below the value area that had contained most of its price action over the past two-plus months, handing sellers greater technical control.

Specifically, the price broke below a swing area between 0.8029 and 0.8034, and then through another swing area spanning 0.8009 to 0.80178. The selling continued on Thursday with a break below the 100-day moving average, but downside momentum stalled near the 61.8% retracement at 0.79519. The low reached 0.7949 before buyers stepped in and pushed the price higher late in the session.

In trading today, the price action has been more up and down, but importantly the broken swing area between 0.8009 and 0.80178 has held as resistance both late yesterday and again today. That makes the area a key short-term barometer for buyers and sellers. As long as the price remains below 0.80178, the bias stays in favor of the sellers. The 0.8000 level is also in play, with the price currently trading above and below it.

That sets the short-term technical roadmap. A move back above 0.80178 would give buyers more confidence and shift the focus toward the next swing area at 0.8029 to 0.8034. Conversely, staying below 0.80178 keeps sellers in control and puts the 100-day moving average at 0.79747 back in play. A break below that moving average — and the ability to stay below — would increase the bearish bias and open the door to another run toward this week's lows.

In the accompanying video, the author outlines the technical levels in play, explains why they are important, and shows what buyers and sellers need to do to take greater control.

Meanwhile, US stocks are higher in early trading but off their premarket levels. The Dow industrial average is up 260 points, or 0.50%. The S&P is up 0.35%, the NASDAQ index is up 0.25%, and the NASDAQ 100 index is also up 0.25%.

Source: InvestingLive