EURCHF is struggling to gain positive traction, 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.
The bearish outlook and the recent price depreciation are mostly supported by the short-term momentum indicators, as the RSI is hovering above its oversold region. However, the MACD is found below zero but above its red signal line, which indicates that the negative momentum might be fading.
Should the price drop below its 1.0494 support, the selling pressure could intensify, sending the price to test its July 2015 low of 1.0404. A further descending movement from this crucial point could strengthen the pair’s negative momentum, paving the way towards the April 2015 low of 1.0230.
On the flip side, if the price breaks above the 1.0531 level, the bulls may then target the 1.0603 barrier. Surpassing that level could pave the way towards the 1.0655 resistance, before testing the 50-day SMA, currently found at 1.0709. Surpassing the latter could turn the cards around for the pair, changing its outlook to neutral.
In brief, the overall outlook of the EURCHF is negative. However, this might change if the price breaks above the 50-day SMA, while breaking below the July 2015 low could strengthen the pair’s negative momentum.
