In recent trading sessions, the EUR/CHF has shown a fresh wave of bullish energy, climbing up from the vicinity of 0.9300 to test a significant barrier around the 0.9400 mark.
Here are some crucial turning points we’re keeping an eye on in the 4-hour chart timeframe:
EUR/CHF’s journey through December has been characterized by a broad consolidation phase, following a steady decline that began back in September 2024. Now, the pair is at a critical technical crossroads as it approaches several resistance factors converging at once.
Keep in mind that market price trends and volatility are often fueled by fundamental drivers. If you haven’t brushed up on the economic factors affecting the euro and the Canadian dollar, it’s worth consulting the economic calendar and staying informed with daily news on fundamentals!
From a technical standpoint, the price is currently testing the descending pattern of ‘highs’ that have been evident since September, alongside the significant psychological threshold of 0.9400. The 100 SMA is slightly below the 200 SMA in the 0.9330 zone, which indicates that bears still hold the upper hand in the medium-term trend. However, the recent emergence of rising ‘lows’ signals increasing bullish pressure.
For those favoring the bearish side, the current challenge around the 0.9400 resistance could provide an opportunity. This level aligns neatly with the descending trendline of lower highs. Having surged over two daily ATR from 0.9300 during the last week, profit-taking might become a factor following this extended rally.
Should bearish reversal patterns take shape, we might observe a retreat towards the robust technical area around 0.9320. This zone is where the monthly pivot point aligns with both moving averages and the rising ‘lows’ pattern.
On the other hand, if the bulls can decisively push above 0.9400 and maintain momentum, this could draw in technical buyers and potentially extend the move towards the R1 pivot at 0.9437, or possibly even the R2 pivot at 0.9563. However, such a move would likely necessitate a strong fundamental catalyst. The rising ‘lows’ patterns point to increasing bullish momentum, but those trading against the trend should proceed with caution given the overarching downtrend that’s been in place since September.
Regardless of which direction you trade, it’s crucial to apply proper risk management. Stay mindful of the looming economic events that could impact this trading range, especially during the holiday period. Keep an eye on the news to navigate any surprises that might arise.
