EURCHF bears are seen to have driven the market to converge at a confluence between the short-term downtrend and the long-term uptrend. The Market trend reversed on the 18th of May 2020 upon reaching the 1.05100 demand zone. The bulls took charge and drove the price to 1.11500. Price was heavily defended at 1.08850 where a strong resistance was formed. The uptrend found difficulty in pushing through and failed multiple times. The market eventually experienced a successful breakout on the 23rd of February earlier this year. The uptrend faced with the resistance at 1.08850 formed an ascending triangle.
Upon reaching the current yearly high, EURCHF bears stepped in and have driven the price low. This has formed a descending channel that has crashed on the previous resistance zone to form a confluence.
EURCHF Major Zones
Support Zones: 1.05100, 1.06650
Resistance Zones: 1.08850, 1.11500
What to Expect From the Arrival of the Market at EURCHF’s Confluence Zone
The short-term downtrend is seen to confluence with the previous resistance exists. This has formed a notable confluence which would certainly cause a reaction in the market. EURCHF bulls would seek to defend price from dropping below the zone. The previous resistance zone is therefore expected to act as the new support for the price. The support is likely to propel the price back to the 1.11500 year high.
The Stochastic indicator on the chart is presenting a strong alert for a buy. This is seen as the oscillator is currently in the oversold region. This also correlates with the indicator on the four-hour time frame.
If the sellers take over and drive the price below the previous resistance, the market would likely reach for the next support zone at 1.06650.
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