Technical Analysis – EURCHF bulls under pressure; can they stage a comeback?
April 10, 2023 8:27 am
EURCHF appears to stabilize in the middle of the wide 0.9741-1.0006 rectangle that has dominated price action since October 13, 2022. The latest move lower from the end-March highs seems to be the product of the bearish divergence between EURCHF and the stochastic oscillator that could further influence price action going forward.
The convergence of the 50- and 100-day simple moving averages (SMAs) and the aggressive tightening of the Bollinger Bands convey a message of a fragile balance between buyers and sellers. The Average Directional Movement Index (ADX) is trying to break above its 25-threshold, but there seems to be hesitation from market participants to make the first move. The path of least resistance appears to be bearish, hence the onus is on the bulls to stage a reaction.
Should the bulls decide to take over the market, they would have to deal with the 50- and 100-day SMAs at the 0.9901-0.9913 area first. They would then be faced with the busy 0.9958-0.9971 range set by 50% Fibonacci retracement of the June 9 – September 26 downtrend and the March 7, 2022 low. Even higher and assuming that the new upside breakout does not prove to be false again, the 1.0089-96 range defined by the 61.8% Fibonacci retracement and the January 13 high respectively could trouble the bulls.
On the other hand, the bears would have to deal with the 0.9827-33 range first. This is defined by the 200-day SMA and the 38.2% Fibonacci retracement respectively and could prove tougher to crack. The lower boundary of the ongoing rectangle at 0.9741 would come next, just ahead of the November 14, 2022 low at 0.9706.
To sum up, EURCHF appears to be in a delicate balance. Bulls appear to be under pressure to act, but the overall technical picture does not look favourable for them.
EURCHF appears to stabilize in the middle of the wide 0.9741-1.0006 rectangle that has dominated price action since October 13, 2022. The latest move lower from the end-March highs seems to be the product of the bearish divergence between EURCHF and the stochastic oscillator that could further influence price action going forward.
The convergence of the 50- and 100-day simple moving averages (SMAs) and the aggressive tightening of the Bollinger Bands convey a message of a fragile balance between buyers and sellers. The Average Directional Movement Index (ADX) is trying to break above its 25-threshold, but there seems to be hesitation from market participants to make the first move. The path of least resistance appears to be bearish, hence the onus is on the bulls to stage a reaction.
Should the bulls decide to take over the market, they would have to deal with the 50- and 100-day SMAs at the 0.9901-0.9913 area first. They would then be faced with the busy 0.9958-0.9971 range set by 50% Fibonacci retracement of the June 9 – September 26 downtrend and the March 7, 2022 low. Even higher and assuming that the new upside breakout does not prove to be false again, the 1.0089-96 range defined by the 61.8% Fibonacci retracement and the January 13 high respectively could trouble the bulls.
On the other hand, the bears would have to deal with the 0.9827-33 range first. This is defined by the 200-day SMA and the 38.2% Fibonacci retracement respectively and could prove tougher to crack. The lower boundary of the ongoing rectangle at 0.9741 would come next, just ahead of the November 14, 2022 low at 0.9706.
To sum up, EURCHF appears to be in a delicate balance. Bulls appear to be under pressure to act, but the overall technical picture does not look favourable for them.
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