EURCHF remained on the sidelines on Thursday following the ECB policy announcement, completing a symmetrical triangle below the 200-day simple moving average (SMA) at 0.9868.
The formation occurred within a short distance above the 7½-year low of 0.9551, with the momentum indicators currently flagging a neutral-to-bullish bias. The RSI is moving horizontally marginally above its 50 neutral mark, the stochastics – although pointing upwards – maintain a neutral trajectory between their 20 and 80 levels, while the MACD is stable around its red signal line.
For the bulls to get full control, the pair will need an advance above the triangle and beyond the 200-day SMA, which is currently lying around the 50% Fibonacci retracement of the June-September downfall at 0.9958. If the recovery extends above the 1.00500 constraining zone, the next target will be the 61.8% Fibonacci of 1.0160.
A step beneath the triangle’s lower trendline, where the 38.2% Fibonacci of 0.9827 and the shorter-term SMAs reside, may initiate a new bearish wave towards the 0.9700-0.9655 territory. Some consolidation could follow around the 0.9600 and 0.9500 numbers before the 2022 low of 0.9551 shows up on the radar.
Summarizing, EURCHF could become volatile in the coming sessions as a symmetrical triangle nears a completion. A sustainable rally above 0.9950 could give the lead to the bulls.
