The EURCHF tilts to the downside on the break of the 200/100 hour MAs

  


The pair is trading between a swing area above and swing area below over the last 7 or so trading days

The EURCHF reached a high yesterday at 1.05973 and reached that same level today. Just above those highs are highs from November 1 and November 2 near 1.06034. That six pips area is the short term ceiling for traders in the pair on the hourly chart.

On the downside, there is a short-term floor at the recent cycle lows. Those levels come between the 1.05339 (the low from Friday’s trade) and 1.05396 (the low from November 1).  There are a number of the lows between those levels from last Thursday and again yesterday

In between the higher yellow area (ceiliing) and the lower yellow area (floor), sits the falling 200 hour moving average 1.05785 and the 100 hour moving average at 1.0565 (green and blue lines on the hourly chart above).  

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Today, in addition to holding against the high from yesterday, the pair has also fallen back below the 200 and 100 hour MAs.  The current price is trading at 1.0557.  Stay below the MAs tilts the bias more in the downside direction.  Stay below and traders will target the lower floor area.  

Are there any clues from the daily chart?

Looking at the daily chart below, the pair has been trending to the downside since last peaking in September at 1.09371. The very next day, the price fell back below its 200 day moving average (green line) and then the 100 day moving average. After testing the 100 day moving average toward the end of September (follow the blue line in the chart below), and holding below the level, sellers entered and trended the market to the downside. 

Fast forward to the last seven or so trading days which has seen the consolidation ahead of the swing lows going back to 2020 between 1.0516 and 1.04977. Once again the low price has reach 1.05337 (that is also the lowest level going back to May 2020).  

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On the way to the low, the price fell below the swing low going back to July 2020. That low came in at 1.10603. What is the importance of that level?    

Remember, the 1.0603 level from the hourly chart corresponds with the high of the upper swing area.  In other words, sellers are keeping a lid on the pair against the broken July 2020 level.  That increases the levels importance.  

So going forward… for the buyers to take more control, not only will they need to get the price back above the 100 and 200 hour MA from the hourly chart, but also the 1.0603 ceiling on the hourly which corresponds with the swing low from July 2020.  

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Those are the levels that will give any dip buyers more comfort. Absent that, and the downside is the direction of choice for the EURCHF.

EURCHF on the daily chart.

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