EURCHF keeps trading sideways marginally above its six-year low of 1.0365, unable to find enough power to breach the limits from the 20-day simple moving average (SMA).
Despite the ongoing neutral trajectory, the higher highs in the RSI and the improvement in the MACD keep hopes for an upside reversal alive. The positive momentum in the Stochastics is adding to this optimism, while the squeeze in Bollinger bands is another indication that volatility could soon expand.
In the bullish scenario, a forceful move above the 20-day SMA could immediately pause somewhere between the 1.0480 barrier and the 23.6% Fibonacci retracement of the 1.0937 -1.0365 down leg at 1.0500. Running higher, the price could visit the 38.2% Fibonacci of 1.0583 and the 1.0600 psychological mark, while a sustainable advance above the 50% Fibonacci of 1.0650, which overlaps with the November 2020 lows, would upgrade the big picture from bearish to neutral.
In the event the 20-day SMA stands firm, pressing the pair below the six-year low of 1.0360, traders could seek support around the 1.0300 level before targeting the 1.0223 handle. This is the territory where the price found shelter in the second-half of 2015 following the bounce from 0.9649. The 1.000 number could be of psychological importance; hence, it is expected to provide some footing if the descent continues.
In brief, although EURCHF is barely exhibiting any directional moves at the bottom of its downtrend, the technical indicators suggest the bulls could be around the corner.
