EUR/CHF has rebounded overnight, moving away from its upwards moving support line, taken from the low of the 29th of May. This could be taken as a positive sign and more bulls could get interested in joining in the action.
Looking from the short-term perspective, we still believe that there is a decent possibility of a potential move higher. This idea is supported by the fact that the pair broke through its strong level of resistance at around 1.1565. EUR/CHF had tested the 1.1585 level, which is another good area of resistance. If the pair breaks that level and continues push higher, then the next potential strong area of resistance could be seen at around the 1.1650 zone, which held the price from moving higher at the beginning of June.
That said, there could be a scenario where EUR/CHF moves back down, to test the aforementioned upside support line, which could act as a bouncing ground for another move higher.
The RSI supports our upside scenario. It stands above 50 and looks to be heading towards the 80 zone. The MACD is also helping by moving above both the zero and trigger lines. Both indicators showing signs of strength for the near-term.
Alternatively, if the bears decide to take the driver’s seat and break the upside support line, this could lead to a decline towards the 1.1490 level. If that level is not able to withhold the rate from dropping further, we could aim for the next support zone, near the 1.1460 area.
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