Technical Analysis – EURCHF runs above SMAs but Ichimoku cloud acts as strong resistance


Melina Deltas, XM Investment Research Desk

EURCHF staged a respectful bullish rally following the bounce off the 100-day simple moving average (SMA) around the 1.0595 support. 

In the very short-term, the positive bias is confirmed by the momentum indicators. The RSI is climbing above the 50 level, while the MACD, having crossed above its trigger line in the negative region, is trying now to surpass the zero line.

Should the price close comfortably above the lower surface of the Ichimoku cloud and the blue Kijun-sen line around the 1.0710 resistance, buyers could push towards 1.0767. Higher, the pair could run aggressively towards the 1.0915 peak.

In the negative scenario where the 20- and 40-day SMAs halt downside movements, the market could retest the previous low of 1.0595. If this proves easy to overcome this time, the decline may next pause somewhere near the five-and-a-half-year low of 1.0505.

In brief, EURCHF could push for more gains in the near-term as the risk seems to be improving, though the bulls may need to lift the 1.0710 barrier to extend the recent rebound. In the bigger picture, the pair maintains a bearish structure.