EURCHF is struggling to gain optimism as its 50-day simple moving average (SMA) has crossed below the 200-day SMA completing a ‘death cross’, increasing fears of a sustained bearish outlook. Moreover, the pair is currently trading well below its early March descending trendline, indicating that a short-term convergence towards that point should not be ruled out.
The bearish outlook and the recent price depreciation are also supported by the short-term momentum indicators, as the RSI is currently below its 50 neutral mark, while the MACD is found below zero but above its red signal line, which indicate that the negative momentum might be fading.
Should the price drop below its 1.0531 support, the selling pressure could intensify, sending the price to test the 1.0503 barrier. A further descending movement from this point could promote further selling activity, paving the way towards the April 2015 low of 1.0404. Breaking below this crucial support could strengthen the pair’s negative momentum.
On the flip side, if the price breaks above the 1.0603 level, the bulls may then target the 1.0655 barrier. Surpassing that level could pave the way towards a region which encapsulates the 50-day SMA currently found at 1.0742, and the 1.0765 resistance. Advancing higher from that region, the bulls might target the 1.0864 resistance and the 200-day SMA currently found at 1.0881. Surpassing the latter could turn the cards around for the pair, changing its outlook to positive.
In brief, the overall outlook of the EURCHF is negative. However, this might change if the price breaks above the 200-day SMA, while breaking below the April 2015 low could strengthen the pair’s negative momentum.
