EURCHF staged a spectacular rebound last week to surpass its shorter-term simple moving averages (SMAs) and enter the Ichimoku cloud in the four-hour chart.
Buyers seem to have the upper hand as the MACD keeps extending positive momentum, the RSI is comfortably above its 50 neutral mark, and the triple exponential average (TRIX) is preparing to turn positive, all flagging positive prospects in the short-term.
A decisive close above the cloud would convince traders that more gains may follow, especially if such an action happens above the 200-period SMA and the 61.8% Fibonacci of 1.0982 of the downleg from 1.1057 to 1.0862. Running higher, resistance could be next detected around the 78.6% Fibonacci of 1.1016 and then near 1.1034.
On the flip side, a downside reversal could initially challenge the 38.2% Fibonacci of 1.0936 and the recent troughs around 1.0928. Another leg lower, would open the door for the 1.0900 support area which encapsulates the 23.6% Fibonacci, while beneath that, support could shift down to the 1.0862 bottom.
Meanwhile in the bigger picture, the neutral outlook is well intact, with the pair fluctuating sideways between 1.1057 and 1.0810.
In brief, EURCHF is looking bullish in the short-term and a significant rally above the cloud could underpin the positive sentiment.
Forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
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