Weekly
• Last Candlesticks pattern: Doji
• Time of formation: 20 Feb 2017
• Trend bias: Up
Daily
• Last Candlesticks pattern: Doji
• Time of formation: 1 Sep 2016
• Trend bias: Near term down
EUR/CHF – 1.0668
Despite last week’s brief bounce to 1.0727, as the single currency has fallen again after faltering below indicated resistance at 1.0736, suggesting the fall from 1.0825 top is still in progress and near term downside risk remains for this move to extend further decline towards 1.0622-31, however, break of this level is needed to signal the decline from 1.1201 (2016 high) has resumed and extend subsequent weakness to 1.0590-00, then towards 1.0530-35 but loss of downward momentum should prevent sharp fall below 1.0500, price should stay well above 1.0400-10, risk from there has increased for a strong rebound to take place later.
On the upside, whilst initial recovery to 1.0700 cannot be ruled out, reckon upside would be limited to said resistance at 1.0727 and bring another decline later. Only a daily close above 1.0727 would suggest the fall from 1.0825 has ended instead, bring a stronger rebound to 1.0763, break there would add credence to this view and encourage for further gain to 1.0790-00 but said resistance at 1.0825 should remain intact. In the event euro is able to penetrated resistance at 1.0825, this would shift risk back to upside and signal low has been formed instead, bring further subsequent gain to 1.0850 and later towards key resistance at 1.0899 (Dec high).
Recommendation: Stand aside for this week.
On the weekly chart, although the single currency rebounded initially last week, renewed selling interest emerged around the Tenkan-Sen and price has slipped again, suggesting the retreat from 1.0825 is still in progress and may extend weakness to indicated strong support at 1.0622-31, however, break there is needed to signal recent decline from 1.1201 top has resumed and extend further fall to 1.0550-55, then 1.0500-10 but oversold condition should prevent sharp fall below 1.0400-10 (100% projection of 1.1201-1.0622 measuring from 1.1001) and price should stay well above previous support at 1.0314, risk from there is seen for a rebound to take place later.
On the upside, expect recovery to be limited to 1.0700-10 and bring another decline. Above the Tenkan-Sen (now at 1.0728 would bring rebound to 1.0760-65, however, reckon upside would be limited to 1.0825 resistance and bring further consolidation. Only a break of 1.0825 would signal low has been formed at 1.0631, bring retracement of recent decline to 1.0850 but a break above indicated resistance at 1.0899 is needed to add credence to this view and bring a stronger rebound to 1.0970-75, then test of 1.1001. Looking ahead, only a sustained breach above 1.1001 would signal the fall from 1.1201 has ended, bring further gain to 1.1100 but reckon resistance at 1.1129 would hold on first testing.
