- EURCHF drops to a 4-month low
- Significant correction over the past 15 days
- Momentum indicators confirm the bearish pressure
EURCHF has been on a freefall since late May with the move picking up pace following the recent European elections and the first ECB rate cut. This pair is currently trading at a 4-month low, around 4% lower than the recent May 27 peak, and on Friday it managed to successfully break through a strong support area.
In the meantime, the momentum indicators are firmly supporting the current downleg. In more detail, the Average Directional Movement Index (ADX) is acknowledging the strong bearish trend in the market despite the muted performance of the D- indicator. Similarly, the RSI has dropped to the lowest level since December 2023 and is thus confirming the current strong bearish pressure. Unsurprisingly, the stochastic oscillator is hovering at its oversold (OS) territory, where it can stay for a while before signalling a reversal.
Should the bearish appetite remain strong, the bears will try to keep EURCHF below the 0.9550-0.9577 area and then gradually push it towards the September 26, 2002 low at 0.9403. The path then looks unhindered for a much stronger correction towards the 0.9253 level.
On the flip side, the bulls are trying to catch a falling knife. Should they manage to regain control, they could try to push EURCHF back above the 0.9550-0.9577 range and towards the 200-day simple moving average at 0.9593. If successful, the bulls could then have the chance to overcome the January 15, 2015 low at 0.9650 and then gradually retest the much busier 0.9679-0.9734 area.
To sum up, the continued bearish pressure has pushed EURCHF to a new 4-month low with the bulls still unable to record a proper reaction.
