Technical Update - EURCHF resumes downtrend after minor correction
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
After a minor correction, actually smaller than anticipated, where EURCHF broke out of its falling channel it didn’t move much. Testing the upper trendline on the upper side and would normally then take off. Instead EURCHF is, at the time of writing, breaking back below in to the channel close to testing last week’s low. If EURCHF closes below the trendline the downtrend has resumed.
For this scenario to be reversed EURCHF must break above 0.9950
A longer term down trend confirmed when EURCHF broke below its Neckline in the Shoulder-Head-Shoulder pattern it has formed on the monthly chart. EURCHF is likely to reach the 0.618 retracement at 0.9657 within 1-2 weeks.
However, further downside is likely. If EURCHF should travel the same distance as from the Head to the Neckline (illustrated by the two vertical arrows) it could drop to around 0.91-0.90
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