Technical Analysis – EURCHF bulls eye September high
October 31, 2023 12:25 pmVideo
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EURCHF continues to edge aggressively higher
It tests the support set by a long-term descending trendline
Momentum indicators point to further upside
EURCHF is edging higher again today, continuing on the strong uptrend that commenced after the pair registered its lowest level since September 26, 2022. EURCHF is actually recording six consecutive green candles for the first time since the October 2022 rally. Interestingly, it is now a tad above the key June 9, 2022 downward sloping trendline. EURCHF has repeatedly failed to close confidently above this trendline.
In the meantime, the momentum indicators point to further upside. In more detail, the Average Directional Movement Index (ADX) is edging higher and thus signaling that the short-term bullish trend might have legs. Interestingly, the RSI has managed to climb above its 50-midpoint, revealing the presence of bullish pressure. Additionally, the stochastic oscillator is aggressively moving higher, almost in vertical fashion, and creating a gap from its moving average.
Should the bulls remain confident, they could try to finally break the long-term descending trendline and the 100-day simple moving average (SMA) respectively. They could then test the 0.9650-0.9665 range, which is defined by the January 15, 2015 low and the 23.6% Fibonacci retracement of the June 9, 2022 – September 26, 2022 downtrend. Even higher, they could meet resistance at the 0.9706-0.9727 area.
On the flip side, the bears are desperate to put a temporary stop to the current upleg. They would try to defend the descending trendline and push EURCHF lower, towards the 0.9552-0.9567 range, defined by the August 23, 2022 low and the 50-day SMA. Even lower, the path appears to be clear until the September 26, 2022 low at 0.9403.
To sum up, the bullish move appears to be gaining speed, but the bulls have to decisively break the June 9, 2022 downward sloping trendline if they want the current upleg to continue.
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