After rallying for 3 consecutive trading days, EUR/CHF bullish momentum appears to be sputtering just under 1.24. Price was trading sideways after hitting 1.24, with current period breaking to the underside of the trendline, hinting at a potential larger correction.
8 Hourly Chart
8 Hourly chart agrees, with the first 2 red candles appearing since price enjoyed the bullish breakout from 1.21. Bollinger Band further suggest that a pullback was always going to be likely – Rally started with candles having majority of its body outside the upper-band, to having the last candle’s body almost fully within the band – Slowing down of bullish momentum.
1.24 shows its influence on prices on the weekly chart. Failure to maintain current price levels may encourage short-term profit taking, adding pressure onto current price levels. Beyond 1.24, bulls may face resistance in the form of 36.2% Fib retracement from 2007 highs vs 2011 lows. Lower support can e found around 1.22, and eventually 1.20. Break beyond 1.20 is highly unlikely considering SNB’s commitment to keep its 1.20 floor, though a break may quickly push price back into 1.02 in quick fashion due to a failure of SNB.
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