Since the end of January, EUR/CHF has stayed captured between two lines in a channel down formation (black lines). Yesterday brought us a test of the support and bulls managed to hold 1.2260, which started an upswing aiming at the down channel’s upper line. Wednesday’s session in the European market has started with a bullish initiative to test that line and at the same time a resistance at 1.2340 (yellow area). Breaking it should have a big impact on the mid-term situation of this pair and should start a major upswing aiming at least at 1.2410 – the top from 1st of February.
The scenario depends on this bullish attack. If buyers will manage to break this level, traders can think about opening long positions on the recent resistance, during the pullback that is likely to happen. On the other hand, a failure of the bullish movement should form some kind of a reversed candlestick pattern like a falling star or a dark cloud cover. If traders will spot any of these formations at the resistance, it will be a good chance to open short positions that should aim at least at 1.2260, having a low risk to reward ratio.
Currently, the bullish attack looks promising but for a definite decision it would be wise to wait for an hourly candle to close. If the candle closes high above the resistance will be positive and on the other hand, a long upper wick and the candle closing below the resistance should be considered as a sell signal.
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EUR/CHF Continues Its Way Down In A Bearish Channel
Published 02/06/2013, 06:48 AM
Updated 01/31/2022, 02:45 AM
EUR/CHF Continues Its Way Down In A Bearish Channel
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