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EURCHF has settled above mid 1.16s

Market Analysis

EURCHF, H4

EURCHF has settled lower, south of 1.1700 having backed off after testing the 34-month high at 1.17123 yesterday, which was initially clocked on November 17. The cross is pivoting around 20-Day moving average, however remains in an uptrend since April.  The uptrend’s corrective action is taking place above the 50-Day EMA and currently above 1.1565 level. Meanwhile, the momentum indicators look supportive on the bulls, suggesting that there is still space on the upside. The RSI is neutral at 58, MACD remains positive since June, wile Stochastic is at 76 sloping up.

Assuming the Eurozone has conquered, or can conquer, existential political threats, and assuming the SNB remains anchored to ultra-accommodative monetary policy, which looks likely to be the case for the foreseeable, in long term the bullish outlook for EURCHF still holds.  Therefore on a break above the 1.1730-1.1750, we could see the pair making an eventual return to 1.2000, which is the former trading floor of the SNB.

Oppositely, EURCHF had sustain multiple failures to sustain gains above 1.1700 over the last month, and is still in the process of forming a Double top pattern in November with neckline at 1.1585. Therefore a break below that neckline , will suggests that sellers gaining the control of the pair , with next support area at 1.1550, 1.1450, 1.1345.

Intra-day, the pair after overnight’s high, it has been seen today holding a support at 1.1665 level, which is also a confluence of 20 period MA and the last low Fractal in the 4-hour chart. Intra-day indicators are quite mixed , with RSI and Stochastics at 55-58 , while MACD is positive. Hence a break below the low fractal at 1.1665, will triggered a short position with targets at 1.1640 (61.8% Fib. level) and at 1.1610 (200-period MA) and support at 1.1710. This is against the Daily trend. If however, the support at 1.1665 holds and pair moves up to 1.1695, then an intra-day long position will be taken, with target at 1.1720.

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Andria Pichidi

Market Analyst

HotForex

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