EUR/CHF tumbled yesterday, breaking back below the 1.0800 zone. The rate was also driven below last Wednesday’s low of 1.0783, to hit support at around 1.0757. It oscillated there for a while, and today it briefly moved below that level. Overall, EUR/CHF has been printing lower lows and lower highs below the downside resistance line taken from the peak of December 17th, and thus, we would consider the short-term outlook to be negative.
If the bears are strong enough to distance themselves from the 1.0757 zone, we could see them targeting the 1.0720 zone soon, which provided resistance back on April 5th, 6th, and 20th, 2017, and could now act as a support. If that zone is not able to halt the slide, then we may experience extensions towards the 1.0700 barrier, which stopped the price from moving higher on April 11th and 12th, 2017.
Taking a look at our short-term oscillators, we see that the RSI has been flat since yesterday, oscillating around its 30 line, while the MACD, although below both its zero and trigger lines, shows signs of slowing down. Despite both indicators revealing downside speed, their slowdown makes us careful that a small corrective bounce may be looming before the bears decide to shoot again.
On the upside, we would like to see a clear break above 1.0835, marked by the highs of January 9th and 13th, before we start examining whether the bulls have stolen the bear’s swords. The rate would already be above the aforementioned downside line and may initially aim for the peaks of January 6th and 7th, at around 1.0860. Another break, above 1.0860, may allow the bulls to put the 1.0883 obstacle on their radars. That level acted as a resistance on December 31st.
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