EURCHF Retracts as Negative Sentiment Sustains Sideways Pattern

Technical analysis of Forex market

EURCHF has recently receded below the 50-day simple moving average (SMA), determined to test the base of a near two-month persisting range. Negative sentiment appears to be prevailing in the short-term oscillators as well, despite the bullish bearing of the 50- and 100-day SMAs.

The MACD is barely holding in the positive region but below its red trigger line, while the RSI has slipped into bearish territory. The stochastic lines appear tangled and remain in the oversold zone.

If selling interest persists, initial hardened support may arise from the floor section of the range from 1.0729 until the 1.0714 level, which also happens to be the 38.2% Fibonacci retracement of the down leg from 1.1058 to 1.0504. Sinking under this foundation, the adjacent 1.0700 handle, coupled with the 100-day SMA, may provide additional sturdy constrictions to downside moves. Another step lower may challenge the neighbouring 200-day SMA at 1.0679, before steeper declines target the 23.6% Fibo of 1.0635 and the 1.0598 trough.

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Otherwise, if buyers manage to drive the price above the capping 50-day SMA at 1.0760, early resistance could come from the 50.0% Fibo of 1.0781, ahead of the roof of the horizontal market. Surpassing the 1.0837 barrier and the 61.8% Fibo of 1.0847, which are creating the ceiling, the 1.0877 peak may draw attention. Sustained gains may then zone in on the 1.0914 peak and nearby 76.4% Fibo of 1.0928.

In brief, EURCHF stubbornly retains a neutral-to-bullish bias in the short-term timeframe. A break below 1.0700 or above 1.0847 will trigger the next direction.