EURCHF TECHNICAL FORECAST – Buyers Set To Make Higher Highs.

EURCHF broke its 2020 high in February 2021, as the price removed the weekly resistance at 1.08600 to create a new high at 1.11500 in March 2021. This bullish movement on this pair can be linked to a weakness in the Swiss Franc, as other currencies rose against CHF at the beginning of this year.

Swiss Franc is one of the safe-haven currencies, which is used to hedge against inflation, just like Gold. The world economy collapsed in early 2020, as the pandemic hits the world. This made investors put their money into safe-haven currencies and assets so that their money won't lose its actual value.

EURCHF hits its lowest price of 1.05035 in May 2020, before the price turned around. The upward movement continued as the world economy recovers from the pandemic.

The price of EURCHF has been increasing ever since it hits its lowest price 3 years in May 2020. A new bullish trend was formed as the bears ran out of steam since the new low was created. The weekly resistance at 1.08600 was removed in Feb. 2021, after weeks of sideways movement, creating a new high at 1.11500. Price has moved above the last high that was created in Dec. 2019, just before the three-year low price was created a few months later.

Looking at the daily chart, the price of EURCHF is above the weekly resistance and the 200-day MA. There is still a wide gap between the 200-day and 50-day MA, which signifies that we are still in a bullish market on this pair.

The deep pullback that started in April is now coming to an end as the price has made three lower highs as seen in the chart below. The price of EURCHF is currently trading sideways, which signifies strength on both sides of the buyers and sellers. A range is the first sign that a trend is coming to an end, most especially at the territory of the other party. In this case, sellers ranging at the buyers' territory only indicates weakness as they have failed to breach below it after several attempts.

A break above the range will see the price rise to 1.10500 before attempting to make a new high. 1.12500 is the main target on this pair for the bulls as the price is set to make new highs in the coming weeks.

A break below the range is still in buyer's territory as the 200-day MA can be used as support on this pair. 1.08900 is a good buy area if the price breaks below the current sideways movement.

From the Commitment of Trader's report (COT), the non-commercials have been increasing their long positions on Euros in the last 3-4 weeks, and at the same time, they have been closing their long positions on CHF as well.

This only signifies one thing, that a new bullish run is imminent on this pair.

NOTE: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views of WikiFX. Every investment and trading move involves risk. You should conduct your own research when making a decision and use proper money management.

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