The
USDCHF is 3+ days now within a narrow 42 pip trading range. That is not a whole lot.
Yesterday, the price took a quick peek above the Monday high at 0.9261, but one pips later the buyers turned sellers in pushed back down toward the 50% midpoint of the trading range since January 21. That low at 0.9225 was above the low from Monday at 0.9220.
The subsequent bounce back to the upside – also during yesterday’s trade – reached up toward the broken 38.2% at 0.92528. This time sellers came in early against the swing highs for the week. Since then, the price action has chopped back down in trading today.
The move down today did move back below its 200 hour MA and 100 hour moving average (currently at 0.9241 and 0.9233 respectively) and also below the 50% retracement at 0.92251, but fell short of the low from Monday at 0.9220. .
The range remains the same. The ranges are also getting more narrow and confined. UGH.
Rather than get discouraged, it is time to remain accepting of the “markets” price action.
When the price is confined in a narrow rate trading range, it says the “market” is unsure of the next directional move. The 100/200 hour MAs confirm that view as they converge and start to go more sideways.
Ultimately, there will be a break. The price will get out of the “red box”, and hopefully, traders will be rewarded with more momentum on the break (in which ever direction it chooses to move).
Until then, there may be up and down bias clues from the extremes (buy low and sell high), and the MAs (move above from below and the bias shifts more to the upside and visa versa).
At the same time be aware that at some point there should be a break outside the narrow range.
PS. Last week (on January 31) SNBs Jordan helped turn around the move higher in the USDCHF (lower CHF) and back down toward the middle of the recent trading range (at least in the short term), by saying a strong Swiss Franc limits Swiss inflation. Usually, the central bank laments about Swiss strength, but with global
inflation a risk, the benefits a strong swiss franc may have redeeming qualities as well.
The price the USDCHF moved lower over the next 3 trading days and bottomed at 0.9176 on February 2 and February 3rd. The move higher has taken the pair back toward the 100/200 hour MAs and started the price action sleep walk.
Waiting for the next shove that will rustle the pair out of it’s sleep.