EUR/CHF is retreating today, falling below both its 20- and 40-day simple moving averages (SMAs) as well as beneath the 23.6% Fibonacci retracement level of the downleg from 1.1710 to 1.1120 near 1.1260.
The bigger picture still seems negative as the EUR/CHF has been developing in a descending channel since September 2018. Short-term momentum oscillators concur, with the RSI already below 50 and pointing lower, and the stochastic is posting a bearish cross within the %K and %D lines in the daily timeframe.
Further declines could meet support near the 23-month low of 1.1120, defined by the low on June 3, with a downside break opening the door for the 1.1000 significant handle, taken from the inside swing top on May 2017. This could endorse the scenario for stronger bearish structure.
On the flipside, a rebound may stall near the neighborhood of 1.1260 – 1.1280. Close to that region is also the 40-day SMA currently at 1.1293 ahead of the 38.2% Fibonacci mark of 1.1345.
In brief, some further losses shouldn’t be ruled out in the immediate term, but as long as the EUR/CHF remains in the downward sloping channel, the broader outlook is negative.
by Melina Deltas, XM Investment Research Desk
Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities.
Melina studied Pure Mathematics at Lancaster University and has a Master’s Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).