EURCHF has been underperforming, breaking back below the key 200-period simple moving average (SMA) in the 4-hour chart. When looking at the bigger picture the pair lacks a clear trend and has been consolidating since July 14.
Prices pulled back from the 1.0775 resistance level, which overlaps with the 40-period simple moving average (SMA) but based on technical indicators, momentum is too weak to provide a sustained move higher. The RSI is below 50 and the MACD is trying to jump above trigger line in the negative territory.
If price action remains below 200-period SMA, there is scope to test 1.0732. Clearing this key level would see additional losses towards 1.0700 – 1.0714. This is considered to be a strong support area which has been rejected a few times in the past. Falling below it would see prices re-test the 1.0650 trough and then from there would be a resumption of the downtrend form 1.0848.
On the upside, if 1.0775 fails, then the focus would shift to positive towards 1.0848, which if breached, would increase upside pressure and bring about a reversal of the trend. From here, EURCHF would be on the path towards the 1.0914 high, registered on June 5.
Overall, EURCHF has been neutral and near-term weakness is expected to remain as long as price action takes place near the Ichimoku cloud.
