EUR/CHF exploded to the upside during the European morning and continues to move in the northern direction. The pair broke above its key resistance, at 1.0887, marked by yesterday’s high, and made its way towards the 200 EMA on the 4-hour chart. The rate is now balancing well above its short-term tentative upside support line and at the same time seems to be building its way towards the short-term tentative downside line, drawn from the high July 12th. Given the current increase in the buying interest, we will take a cautiously-bullish approach, at least for now.
A further push north, above the 200 EMA, could help the rate to test the 1.0930 resistance barrier, marked by the high of September 23rd. We may see the rate stalling around there, or even correcting slightly lower. That said, if the pair stays above the 200 EMA, or the 1.0910 hurdle, this may invite the bulls back into the field. We could then see EUR/CHF making its way back up, possibly bypassing the 1.0930 obstacle and targeting the 1.0954 zone, which is the low of September 19th. If the buying doesn’t end there, the next potential resistance area to consider might be the 1.0989 territory, marked near an intraday swing low of September 18th. Around there, the pair could also test the aforementioned downside line, which may provide additional resistance.
Our oscillators, the RSI and the MACD, are somewhat in support of the above-discussed scenario. The RSI is above 50 and point higher. The MACD is now back above zero, also points higher and continues to run above its trigger line.
Alternatively, if the rate suddenly falls back below the 1.0887 zone, marked by yesterday’s high, this could result in a further slide, potentially bringing the pair to the 1.0865 hurdle. That hurdle played the role of an inside swing high of September 27th. If that hurdle is still no-match for the sellers, its break may lead EUR/CHF to the previously-mentioned upside line, which could help support the rate from falling further.
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