EURCHF Maintains Sideways Structure; Bounces on 100-day SMA

Technical analysis of Forex market

EURCHF continues to cycle around the 50.0% Fibonacci retracement of the down leg from 1.1058 to 1.0504, extending its horizontal pattern that has held since the late part of July. The short-term oscillators reflect evaporated directional momentum, and thus have done little to aid a new price development.

The MACD, slightly above zero, holds fairly flat below its red signal line, while the stagnant RSI has fused with its neutral threshold. Moreover, the stochastic oscillator looks relatively neutral, despite its minor improvement with its %K line positively overlapping the %D line.

If buyers manage to thrust over the 50.0% Fibo of 1.0781, the bulls may encounter tough resistance from the roof of the consolidation, from 1.0829 until the 61.8% Fibo of 1.0847, which includes multiple peaks. Conquering this buffer zone, the pair may stretch towards the 1.0877 barrier. Sustained gains may then challenge the 5½-month top and the nearby 76.4% Fibo of 1.0928.

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If selling interest intensifies steering the pair below the 50-day SMA at 1.0774, the price may meet a hardened floor of the neutral market between the low of 1.0733 and the 38.2% Fibo of 1.0716. Should this key support section, which includes the 100-day SMA, fail to halt the decline, the pair may test the 1.0700 handle ahead of the 200-day SMA at 1.0672. Diving deeper, the price may falter at the zone between the 1.0647 obstacle and the 23.6% Fibo of 1.0635, before the focus turns towards the 1.0598 trough.

Summarizing, EURCHF continues to resonate sideways upholding its neutral-to-bullish bias in the short-term picture. A break above 1.0847 or below 1.0700 could reveal the start of a new move.