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Technical Analysis – EURCHF turns bullish again but strong resistance lies ahead
March 28, 2023 4:27 pmVideo
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EURCHF is making another attempt at a rebound after its previous efforts failed at the first ascending trendline. Aside from being capped by the ascending trendline, the bulls also hit a wall at the 50% Fibonacci retracement of the May-September 2022 downtrend at 0.9959, as well as the upper surface of the Ichimoku cloud.
The pair is again trying to pierce above this strong resistance area today and the signals from the momentum indicators are encouraging. The RSI is pointing up as it climbs back above the 50 neutral level, while the MACD has just turned positive and remains positively aligned with its red signal line.
If the bullish bias strengthens further and the resistance zone between the cloud top at 0.9953 and last Thursday’s intra-day high of 0.9997 is successfully cleared, the next stop could be the early March peak of 1.0041. Higher up, the 61.8% Fibonacci of 1.0090 could be challenged as this is where the uptrend stalled back in January, while further north, the previously congested region of 1.0190 could come into focus.
To the south, the Kijun-sen line could provide immediate support at 0.9873. If not, the 200-day simple moving average (SMA), which is converging with the 38.2% Fibonacci of 0.9827, could halt the decline. Otherwise, any fresh selloff could stretch until the second ascending trendline near the March lows and potentially even lower, until the 23.6% Fibonacci of 0.9665.
To conclude, there is hope yet for EURCHF to break above the current key resistance zone, but even then, the longer-term uptrend won’t be rekindled until the price is back above the January high of 1.0096. Alternatively, if today’s upside push stumbles again, it would increase the odds of the positive long-term outlook turning neutral.
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