- EUR/CHF has reversed its intermediate bearish trend and is rallying strongly.
- There are few technical obstacles in the way until the pair reaches parity.
- EUR/CHF is oversold according to the RSI, suggesting the risk of a pullback.
The EUR/CHF pair is trading at 0.9847 and is rising, extending its uptrend in both the short and medium term. The path is open and parity is in sight.
Euro/Swiss Franc: Daily Chart
The pair has broken above all major moving averages and a downtrend line, suggesting that the downtrend has been broken.
EUR/CHF has formed more than two higher highs and higher lows since reversing the January lows, establishing a bullish high-low pattern. Generally, this is a sign that you are in a young uptrend on the daily chart, commonly used to evaluate the medium-term trend (lasting 3-6 months).
Keeping in mind the old adage that “the trend is your friend until the bend,” EUR/CHF is expected to continue its new uptrend.
The next key resistance level lies around parity, suggesting that the pair could rally to that level without too many obstacles.
The 50-day simple moving average has surpassed the 100-day simple moving average, which is a bullish signal. It also just surpassed the 200-day SMA. However, in the case of the 200, the longer MA still dropped marginally during the crossing, which diluted its reliability, disqualifying it from being a Gold Cross by a hair.
The Relative Strength Index (RSI) is in the overbought zone above 70, suggesting that there is a risk of a pullback. If it crosses back below 70, it will give a sell signal and indicate more strongly that a correction is underway. This, however, would not be enough to reverse the uptrend, it would simply suggest an ongoing pullback.
With the RSI above 70, it is recommended not to open new long positions.
The long-term trend, seen on the weekly chart, remains undecided. Although the price has reversed and moved higher, it is unclear what the trend is, although the strength of the recovery suggests that it could soon confirm an uptrend.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
