EUR/CHF has formed lower highs and found resistance at the .9420 level, creating an ascending triangle pattern on its 4-hour chart.
Is another bounce off support in the works?
Or are we about to see a breakout soon?
EUR/CHF 4-hour Forex Chart by TradingView
This franc pair has been stuck in this triangle holding pattern for more than a couple of months already, as the Swiss currency has been pulled in opposite directions by safe-haven flows and dovish SNB rhetoric.
Meanwhile, the euro has also been tossing and turning while traders await clarity on the ECB’s monetary policy stance, with their latest rate statement suggesting they’re inclined to sit on their hands for much longer.
Does this mean that the triangle formation could continue to keep losses in check?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
EUR/CHF is keeping its head above the triangle bottom and is testing the near-term resistance at the pivot point level (.9370). A break above this could clear the way for a move back to the triangle top near R1 (.9420) or even to the next upside target at R2 (.9470) if bullish pressure is sustained.
Don’t forget that the 100 SMA is still above the 200 SMA to suggest that the path of least resistance is to the upside or that buyers have the upper hand for now, although price has edged below both dynamic inflection points.
On the other hand, selloff below the lows around the .9350 minor psychological mark could set off a drop to the next bearish targets at S1 (.9320) then S2 (.9280), so keep your eyes peeled for long red candlesticks at current levels.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
