EURCHF Analysis – Reversal at 1.07000 Suggests the End of Its Bearish Cycle
The reversal at the 1.07000 key zone may have spelled the end of the bears’ tenure. Bears began plummeting the market on the 4th of March 2021, when the price was rejected at the 1.11500 key level. This set EURCHF on a decline, in which it broke through several key levels. However, bulls grew stronger as the price kept dropping towards the consolidation zone, which has 1.08700 as its resistance and 1.07400 as its support level.
Resistance Zones: 1.08250, 1.08700, 1.09300
Support Zones: 1.07830, 1.07400, 1.06700
The consolidation support level has its influence extended to the 1.06700 price level. Late last year, during a ranging movement, when the market broke downward out of the consolidation zone, it was the extended zone of influence at 1.06700 that effected a price reversal back into the consolidation zone. Thereafter, price continued to range till it broke to the upside of the consolidation zone.
Buyers are therefore successfully employing this zone to effect a reversal of the current market plunge. It took the extended zone of influence at 1.07000 to finally halt the price decline. EURCHF is now making a reversal upwards with strength after bouncing up from the support zone. The RSI (Relative Strength Index) has made a sharp reversal upwards to reach the 63 mark, while the MA period 20 (Moving Average) has also taken a sharp turn upwards below the daily candles.
The price bounced out of the 1.07400 – 1.7000 zone after some ranging movement. Having climbed above the 1.07830 level, the market dropped again to retest the 1.07400 price level, which pushed the price much higher to reach 1.08700. EURCHF is now negotiating the 1.08700 level to move higher. The MA period 20 remains firmly below the candlesticks on the 4-hour chart to act as support. The 4-hour RSI indicator is currently hovering below the overbought region.
In essence, the market is still full of bullish vigor and after breaking the trend of lower highs, bulls are set to start a higher high pattern. 1.09300 is the next target.
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