Hello traders! The EUR/CHF currency pair is consistently producing lower lows and lower highs. Pair has been rejecting the average price downtrend trendline several times with the last time being today.
At the same time, there was a spike produced above the trendline, where price has reached 1.0532 high. At this level EUR/CHF rejected the 200 Simple Moving Average as well as the level of the previous rejection of the trendline.
It shows the importance of the 1.0532 price area, and as long as EUR/CHF will remain below this level, bears will continue to dominate. Considering higher than normal volatility within the Forex Market during past months, we can expect a substantial price decline in the coming days. Overall, there are 3 support levels based on the Fibonacci retracement level applied to the corrective wave up after breaking below the 200 EMA.
However, there is only one key support level which could be the final downside target for the EUR/CHF if downtrend will continue. It is 1.0418 confirmed by two Fibonacci retracement levels. First being the 361.8% Fibs applied to the first rejection of the 200 SMA. The second is the 1061.8% Fibs applied to the second rejection of the 200 SMA.
This makes the potential downside move of 100+ pips, but only if the 1.0532 resistance will remain unbroken. On the other hand, break and close above this level on the 1h and 4h timeframes, would invalidate bullish outlook and EUR/CHF will either enter a long term consolidation phase or correct towards the 1.0556 resistance.
Bias: Strongly bearish while below 1.0532
Potential Resistance Zone: 1.0520 -1.0530
Potential Targets: 1.0495, 1.0456, 1.0419
Have a profitable trading!