Chart of the Day: EURCHF
We looked at USDCHF in yesterday’s Chart of the Day, with the pair currently trading at year-to-date lows. It feels like the USD is making a genuine and sustained move lower here. But it also feels any USD drawdown will be felt on a select basis rather than broad-based. USDCHF looks like it’ll be one of the pairs that’ll find further downside, with USDNOK and USDCAD also potentially headed lower.
So keep USDCHF on the radar, but flip the chart to the EURCHF weekly, and we can see the setup breaking down. If we take the timeframe up to the daily chart, we see that price is working in a bearish channel, with price rallies contained into the five-day exponential moving average (EMA), and pulling away from the 20-day SMA (blue line).
That said, after a 350+ pip move lower since early May, we see a touch of indecision in the price action, with the last two candles closing fairly close to the open. This indecision needs to rectify, so a downside break of 1.1065 should keep the bear move in check.
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