- EURCHF extends recovery to a fresh 2-month high
- Breaks above trendline and eyes 200-day SMA
- Momentum indicators approach overbought levels
EURCHF has been in a downtrend since the beginning of 2023, dropping to an all-time low of 0.9252 on December 29. However, the pair has been staging a rebound in 2024, violating the downward sloping trendline that connects its lower highs in the past year and posting a fresh two-month peak on Monday.
Should the pair resume the recovery and jump above the 200-day simple moving average (SMA), immediate resistance could be met at 0.9574, which is the 38.2% Fibonacci retracement of the 1.009-0.9252 downleg. Claiming that zone, the price may test the 50.0% Fibo of 0.9674, a region that held strong both in September and November. Further upside attempts could stall at the 61.8% Fibo of 0.9774.
Alternatively, if the pair experiences a pullback, the August support of 0.9515 could prove to be a tough barrier for the bears to overcome. Sliding beneath that floor, the price might descend towards the 23.6% Fibo of 0.9451. A violation of that region could set the stage for the December support of 0.9402, which overlaps with the 50-day SMA.
In brief, EURCHF has been in a recovery mode since the beginning of the year, but the long-term downtrend remains intact. Therefore, a break above the 200-day SMA is needed for the bulls to regain some confidence about a full-scale reversal.
