EURCHF Underperforms Below 200-SMA; Neutral Bias

Technical analysis of Forex market

EURCHF has been underperforming, breaking back below the key 200-period simple moving average (SMA) in the 4-hour chart. When looking at the bigger picture the pair lacks a clear trend and has been consolidating since July 14.

Prices pulled back from the 1.0775 resistance level, which overlaps with the 40-period simple moving average (SMA) but based on technical indicators, momentum is too weak to provide a sustained move higher. The RSI is below 50 and the MACD is trying to jump above trigger line in the negative territory.

If price action remains below 200-period SMA, there is scope to test 1.0732. Clearing this key level would see additional losses towards 1.0700 – 1.0714. This is considered to be a strong support area which has been rejected a few times in the past. Falling below it would see prices re-test the 1.0650 trough and then from there would be a resumption of the downtrend form 1.0848.

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On the upside, if 1.0775 fails, then the focus would shift to positive towards 1.0848, which if breached, would increase upside pressure and bring about a reversal of the trend. From here, EURCHF would be on the path towards the 1.0914 high, registered on June 5.

Overall, EURCHF has been neutral and near-term weakness is expected to remain as long as price action takes place near the Ichimoku cloud.