EURCHF- Daily

EURCHF –

Generally speaking, EURCHF is not one that many would pay attention to due to the low ATR values. However, the pair has dusted itself off during the past few months and started making some decent moves once again.

The daily chart above shows that EURCHF witnessed some aggressive buying activity in May from 1.06 up to 1.09 before retracing slightly. From the latest candle developments, we might be seeing a replay of this past behavior. Notice how the RSI indicator headed into heavily overbought territory in May, and we are starting to follow a similar pattern here in November. Now, of course, this may not be the case, but the characteristics are strikingly similar.

Another pattern that appears to be emerging is a head & shoulders reversal. Highlighted on the chart, we see the possibility of a right shoulder forming over the coming days or weeks should bullish sentiment begin to fade. This idea seems plausible thanks to price action comfortably falling through the previous bullish trendline and re-packaging it as a line of upward resistance during the past few trading sessions.

If the H&S reversal pattern comes to fruition, we could see the pair steadily decline, retargeting 1.06 and 1.05 areas, as we witnessed in June. It’s tough to imagine the pair challenging the 1.09 region with any real malice to the upside, but it’s not inconceivable either in this current market environment.

 

Note: Click on charts to enlarge.

 

By Adam Taylor CTEe

.@adamt_trading

Sources: Go Markets, Meta Trader 5, TradingView, Bloomberg

Disclaimer: The articles are from GO Markets analysts,  based on their independent analysis or personal experiences. Views or opinions or trading styles expressed are of their own;  should not be taken as either representative of or shared by GO Markets.  Advice (if any),  are of a ‘general’ nature and not based on your personal objectives, financial situation or needs.  You should therefore consider how appropriate the advice (if any) is to your objectives, financial situation and needs, before acting on the advice.  If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.

Next: Overnight on Wall Street: Wednesday 11 November 2020
Previous: Overnight on Wall Street: Tuesday 10 November 2020