"INDICATOR OF THE DAY" - 100-DAY SMA
The pair remains locked in a very choppy range trade dating back to late January with the market largely confined to the 1.1465-1.1890 area. Looking closer, it has become very apparent that dips within the range have been very well supported by the 100-Day SMA.
Traders will often look to moving averages to provide better clarity for directional bias. One of the more prominent moving averages is the 100-Day “simple moving average” (SMA) which both shorter-term and longer-term traders use to anticipate potential shifts or trend resumptions in the market. In the above example, we can see that the 100-Day SMA has been a very good supporter in Usd/Chf on dips. As long as this SMA can prop setbacks, the focus should continue to be on the upside. A close below however will open the door to a reversal in the trend and expose deeper setbacks over the medium-term.
Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
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