EURCHF Maintains Optimism Drifting Towards the Ichimoku Cloud

Technical analysis of Forex market

EURCHF maintains a positive tone despite fading from the 1.0660 peak of May 18. Backing the sudden soar in price from the 57½-month low of 1.0504 to the 1.0660 high and promoting advances, is the gradual upward gradient in the 100- and 200-period simple moving averages (SMAs). More so, the lower surface of the Ichimoku cloud and the rising 50-period SMA could provide footing to preserve an improving picture.

The technical oscillators reflect mixed signals in directional momentum. Looking at the MACD and the RSI they recommend bullish signals above their neutral marks, with the MACD having just climbed above its red trigger line and the RSI turning up from the 50 level. However, the stochastic %K line has dropped below the red %D line and suggests further weakening in the price.

Should sellers push down from the red Tenkan-sen line at 1.0597, an initial strengthened support region from the lower surface of the cloud until the trough of 1.0575, which includes the 50-period SMA, may provide a basis for the pair to regain ground. If this border fails to halt the decline, then the pair may test the 1.0564 obstacle before the 100- and 200-period SMAs below, at 1.0553 and 1.0547 respectively.

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Otherwise, if buyers re-emerge, the blue Kijun-sen line at 1.0612 may initially hinder the push up to meet the 1.0632 high. A continued hike may encounter a resistance area of tops from 1.0650 – 1.0660, with a run over them shooting the price to the 1.0675 barrier from March 5.

Overall, the very short-term timeframe remains neutral-to-bullish above the 1.0575 low and the SMAs, and a break above 1.0660 may reinstall confidence in a positive picture. However, only an extension above the 1.0709 peak may confirm a bullish bias.