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Technical Analysis – EURCHF rally could extend further if bulls break the 0.9833 area
June 20, 2023 9:27 amVideo
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EURCHF has returned inside the rectangle that has been defining the price action since October 13, 2022. The bears must feel under the weather as their latest downward breakout failed once again, despite almost testing the 0.9665 level. They should probably regroup as the bulls appear determined to stage a proper rally towards the higher end of the rectangle.
The bulls’ intention rests on their ability to break the busy 0.9827-0.9833 range. The momentum indicators are not very supportive of such a move, especially when examining the Average Directional Movement Index (ADX). This remains stuck below its 25-threshold and signaling a range-trading market, despite the recent move. More interestingly, the stochastic oscillator has reached its overbought territory, but it feels like that the upleg has some gas left in the tank.
Should the bulls decide to push the market higher, they would have to overcome the much talked about 0.9827-0.9833 area. This is occupied by the 50- and 100-day simple moving averages (SMAs) and the 38.2% Fibonacci retracement of the June 9, 2022 – September 26, 2022 downtrend respectively. If successful, they would set their eyes on the upper boundary of the rectangle, a tad below the 0.9958-0.9971 range.
On the other hand, the bears would try to push the US 100 index back below the 0.9766 level set by the 50-day SMA. They could then revisit the lower boundary of the rectangle and potentially attempt another bearish breakout with the real target being the 0.9650-0.9665 range.
To sum up, EURCHF is back inside the recent rectangle with increasing chances of a stronger rally if the 0.9833 level is broken.
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