EUR/CHF bearish flag in motion
Kelvin Wong December 10, 2019 3:06 AM
EUR/CHF seems to be staging a potential imminent bearish breakdown.
Medium-term technical outlook on EUR/CHF
click to enlarge charts
Key Levels (1 to 3 weeks)
Intermediate resistance: 1.0980
Pivot (key resistance): 1.1060
Supports: 1.0900, 1.0810 & 1.0650
Next resistance: 1.1195
Directional Bias (1 to 3 weeks)
Bearish bias in any bounces below 1.1060 key medium-term pivotal resistance and a break below 1.0900 reinforces a bearish breakdown below the “bearish flag” ascending range configuration to target the 04 Sep 2019 swing low area of 1.0810 in the first step. Below 1.0810 sees a further slide towards 1.0650 (major range support from 24 Jun 2016/20 Feb 2017 & 1.00 Fibonacci projection of the down move from 20 Apr 2018 high to 07 Sep 2018 low projected from 23 Apr 2019 high)
However, a clearance with a daily close above 1.1060 invalidates the bearish scenario for a squeeze up to retest its major resistance at 1.1195 (former major range support from 07 Sep 2018/01 Apr 2019).
- Since its 1.2005 high of 20 Apr 2018, the EUR/CHF cross pair has been evolving within a major descending channel with its upper boundary now acting as a resistance at 1.1060 that also confluences with a Fibonacci retracement/expansion cluster.
- The recent 2-month 250 pips rebound from its 04 Sep 2019 swing low area of 1.0810 has taken the form of a medium-term “bearish flag” ascending range configuration within a major downtrend phase in place since 20 Apr 2018 high.
- A “bearish flag” configuration tends to indicate a “dead cat” rebound before the bearish movement resumes, right now the support of the “bearish flag” rests at 1.0900.
- The shorter-term 4-hour Stochastic oscillator has reached an extreme oversold level which indicates that the EUR/CHF may see a bounce back to retest it minor range resistance at 1.0980 first before another potential downleg resumes.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.