My turn... request check for typos:
We first rewrite the sequence as (Abel's bright idea: complete the square),
$$x_{n+1}={x_n}^2-2x_n+2=(x_n-1)^2+1.$$
$\textbf{Boundedness:}$ We prove that $x_n$ is bounded on the half open interval $1 \leq x_n<2$ using proof by induction on $n$.
For a basis, let $n=1$. Then $x_1=\frac{3}{2}$, and since $1 \leq \frac{3}{2}<2$, the basis holds.
For the inductive hypothesis we assume that the sequence is bounded for $n=k$, which is to say that
$$1 \leq x_k<2.$$
Our burden is to show that the sequence holds for $n=k+1$.
\begin{align*}
& 1 \leq x_k<2 \\
\Rightarrow & 0 \leq x_k-1<1 \\
\Rightarrow & 0 \leq (x_k-1)^2 <1 \\
\Rightarrow & 1 \leq (x_k-1)^2+1 <2 \\
\Rightarrow & 1 \leq x_{k+1} <2.
\end{align*}
Thus we have shown that the sequence is bounded for all $n \in \mathbb{N}$.
$\textbf{Monotonicity:}$ We now prove that the sequence is monotone decreasing on the half open interval $[1,2)$ by showing that for all $n$, $x_{n+1}-x_n \leq 0$.
\begin{align*}
x_{n+1}-x_n &= (x_n-1)^2+1-x_n \\
&= {x_n}^2 -3x_n+2 \\
&=(x_n-2)(x_n-1).
\end{align*}
Now since $1 \leq x_n <2$, $(x_n-2)(x_n-1) \leq 0$, and we conclude that the sequence is monotone decreasing.
$\textbf{Limit:}$ We can now safely assume that the limit exists.
Suppose that
$$\lim_{n \rightarrow \infty} (x_n)= L.$$
Then
\begin{align*}
& x_{n+1} = {x_n}^2-2x_n+2 \\
\Rightarrow & \lim_{n \rightarrow \infty}x_{n+1} = \lim_{n \rightarrow \infty}\left({x_n}^2-2x_n+2 \right) \\
\Rightarrow &L=L^2-2L+2 \\
\Rightarrow &L^2-3L+2=0 \\
\Rightarrow & (L-1)(L-2)=0 \\
\Rightarrow & L=1 \vee L=2.
\end{align*}
Now since the sequence is monotone decreasing on the interval, $L \neq 2$, and so we conclude that
$$\lim_{n \rightarrow \infty}(x_n) = 1.$$