The US dollar has dominated the currency market so far in November. Using the USDCHF as an example, the pair has gained a total of 645 pips from the U.S. election low on November 9th.
Similar moves have occurred across the majors except for the GBPUSD, which has been surprisingly resilient.
I mentioned the USDCHF on Tuesday of last week. At the time the pair was trading at 0.9982, just 18 pips below parity but support wasn’t far behind at 0.9950.
Just hours after that commentary was published the pair closed the session above the 1.00 handle. Three days later buyers took out the March high at 1.0090.
Fast forward to today, and we can see that the bulls have overcome yet another hurdle. A glance back to the period between November of 2015 and January of this year shows how the 1.0123 level played a vital role.
Note how this area served as support almost exactly one year ago. Then on January 5th the level acted as resistance before once again serving as support to close out the month.
If we move down to a 4-hour chart, we can see how the pair struggled recently to crack this same level. Uncoincidentally last week’s price action also topped out at 1.0123.
A look at the big picture shows that the next key resistance doesn’t come in until the January high at 1.0255. That leaves traders with a range of approximately 130 pips which is quite generous for those who play their cards right.
From here any bullish price action that forms as a result of a retest of the 1.0123 area could offer a compelling buying opportunity.
However, between the overstretched price action and U.S. holiday we could see a few days of consolidation before buyers are ready to extend the rally.
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