EURCHF Analysis – The Market Remains Trapped Beneath the 1.08700 Critical Zone
EURCHF remains trapped within a consolidation zone that lies between the 1.08700 and 1.07830 key levels. Bulls had forged the market into an expanding triangle formation which was oscillating around the 1.08700 key level. However, after expanding outward, the daily candles became trapped below 1.08700 on the 22nd of September and it remains so till today.
EURCHF Critical Levels
Resistance Levels: 1.09190, 1.08700, 1.08300
Support Levels: 1.07830, 1.07400, 1.07000
Price entered this zone on the 8th of July after an initial failure. The zone thereafter disrupted the downward liquidity flow of the market by interrupting the consistent pattern of lower low and high. Subsequently, EURCHF slid down to the lower border of the consolidation zone at around 1.07830, where the market eventually reversed upwards. However, EURCHF has since found it incredibly difficult to break to the upside of 1.08700.
The triangle formation of the market rather resulted in a dip and price remains trapped in the consolidation zone. Price has further fallen to 1.07830. It is also looking increasingly likely that the market will touch down at the support level before it mounts another challenge towards breaking out. The Elders Force Index (EFI) is oscillating around the zero mark but has currently plunged to a negative value. Bears are dominating the market.
On the 4-hour timeframe, after ranging above 1.08300, the price has now dropped to 1.07830. With the bearish pressure still weighing above the market, price will likely range for a while before dropping further to the zone’s support. The Parabolic SAR (Stop and Reverse) has aligned multiple dots above the 4-hour candlesticks to show a current plunge. Also, the EFI on the 4-hour chart shows that more sellers are currently active in the market.
Price is anticipated to drop to 1.07400 before reversing back upwards.
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