EURCHF surged to as high as 1.1396 so far, reaching the highest level since January 2015 after four days of big gains. The near-term bias remains on the upside as the pair is heading sharply higher.
Despite the market being overextended as indicated by the RSI which reached overbought territory above 70, the rally is not showing signs of exhaustion. The technical picture still looks bullish, with the three moving averages being positively aligned and giving bullish signals. The 20-day MA crossed above the 50-day MA, which is also located above the 200-day MA.
Prices are fast approaching a key level at 1.1400, which is likely to be a strong resistance area. The rally could pause here amidst an overextended market (if RSI remains overbought). A break above 1.1400 would open the way towards 1.1500 and then 1.1551 (161.8% Fibonacci extension level of move from 1.1200 to 1.0619).
Should prices fall below 1.1000, this would likely lead to consolidation and bring the pair back to a neutral bias. But only a drop below the 200-day MA in the 1.0700 handle would shift the overall market structure to bearish.
