EUR/CHF traded lower yesterday, after it hit resistance slightly below the 1.0403 barrier, which has been acting as the upper bound of the trendless range the pair has been trading within since March 9th. The lower bound is at around 1.0195, and as long the rate trades between those two bounds, we will hold a neutral stance.
Even if the bulls take charge again and decide to push for another test near 1.0403, we prefer to wait for a break above that zone before getting confident that they are in full control. This could signal the upside exit out of the range and may pave the way towards the 1.0460 zone, marked by the highs of February 22nd and 23rd. Another break, above 1.0460, could signal extensions towards the 1.0530 territory, which acted as a resistance on February 15th and 16th.
Shifting attention to our short-term oscillators, we see that the RSI moved lower after it hit resistance at 70, but it has now ticked up again, while the MACD, although pointing sideways, remains above both its zero and trigger lines. Both indicators point to weak upside momentum, and that’s why we prefer to wait for a break above 1.0403 before we get more optimistic over further advances in this exchange rate.
On the downside, we would like to see a clear dip below 1.0195, the lower end of the aforementioned range, before we assume that the outlook has turned bearish. This could confirm a forthcoming lower low and may initially pave the way towards the 1.0100 zone, marked by the inside swing high of March 7th, the break of which could carry extensions towards an intraday swing low formed that same day, at around 1.0040.
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