Kicking this off from the monthly timeframe, it is resolutely clear that the trend is to the downside. Another key technical observation on the monthly scale is the bearish chart pattern that was recently completed (completed meaning that a breakout lower emerged [which happened to refresh all-time lows of CHF0.9254] beneath the lower boundary of a descending triangle formation extended from the high of CHF1.0042 and a low of CHF0.9435). This—coupled with the price recently retesting the underside of the breached pattern level—alongside the evident downtrend in this market, favours EUR/CHF sellers in the long term and could see some technical hands target sell-on rally scenarios.
Daily resistance in play
Meanwhile, price action on the daily timeframe recently pencilled in a one-sided pullback from the low of CHF0.9254, which, as you can see, formed within a clear-cut downtrend. The pullback, however, has recently shaken hands with technical resistance, consisting of a moderate Fibonacci cluster around CHF0.9482, the 50- day Simple Moving Average (SMA) at CHF0.9466 and the Relative Strength Index (RSI) delivering hidden negative divergence.
H1 trendline support breach
Given where we are coming from on the bigger picture and the longer-term downtrend, the H1 timeframe is likely to see short-term sellers fading any rallies. As you can see on the H1 scale, buyers and sellers are squaring off at the underside of a recently breached trendline support (taken from the low of CHF0.9279), with the CHF0.94 handle calling for attention below. Should sellers overwhelm any buying interest, as the higher timeframes suggest, and the cross engulfs CHF0.94, this could unearth a bearish scenario, targeting H1 support between CHF0.9366 and CHF0.9375.
Technical studies suggest a sellers’ market
So, overall, technical studies indicate sellers should remain in the driving seat south of H1 trendline support and eventually dethrone any bids around CHF0.94 to take aim at H1 support between CHF0.9366 and CHF0.9375 as an initial downside target.
This material on this website is intended for illustrative purposes and general information only. It does not constitute financial advice nor does it take into account your investment objectives, financial situation or particular needs. Commission, interest, platform fees, dividends, variation margin and other fees and charges may apply to financial products or services available from FP Markets. The information in this website has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire or dispose of any financial product. Contracts for Difference (CFDs) are derivatives and can be risky; losses can exceed your initial payment and you must be able to meet all margin calls as soon as they are made. When trading CFDs you do not own or have any rights to the CFDs underlying assets.
FP Markets recommends that you seek independent advice from an appropriately qualified person before deciding to invest in or dispose of a derivative. A Product Disclosure Statement for each of the financial products is available from FP Markets can be obtained either from this website or on request from our offices and should be considered before entering into transactions with us. First Prudential Markets Pty Ltd (ABN 16 112 600 281, AFS Licence No. 286354).
Recommended Content
Editors’ Picks
Live: BoE kept rates unchanged at 5.25%, Governor Bailey explains the decision
The Bank of England left rates steady at 5.25%, as expected. The British Pound fell with the news, as two of the MPC voting members opted for a rate cut. Fears of recession diminish as BOE upwardly reviewed growth forecast. Less loosening at sight.
EUR/USD extends weekly decline, approaches 1.0700
EUR/USD grinds lower and nears 1.0700 in European trading hours. The US Dollar takes modest advantage of a mixed sentiment and the absence of relevant macroeconomic news. An uptick in government bond yields provides additional support to the Greenback.
Gold stable just above $2,300 ahead of a fresh catalyst
Gold price remains little changed for a fourth consecutive day on Thursday, trading just above the $2,300 mark. The soft performance of global equities keeps the bright metal afloat as investors hope for directional clues.
Solana meme coins TREMP, BODEN rise after Donald Trump’s pro-crypto stance
Solana-based meme coins TREMP and BODEN post nearly 125% and 7% gains on Thursday. Former US President Donald Trump says his campaign will likely accept crypto donations.
Forex fundamentals unpacked: Decoding the drivers of major currency movements
This report looks at the recent performance and future outlook for the major currencies, including the US Dollar, Euro, British Pound, Japanese Yen, Swiss Franc, and Canadian Dollar.