EURCHF Makes an Abrupt Reversal Within the Descending Channel

Market Analysis – August 26

EURCHF has made an abrupt change in direction. The daily candles are observed to paddle in an orderly manner within the descending channel. After a retest of the mid-trendline within the channel to the downward side, the price has surged to take the previous high. Without the test of the lower border of the parallel channel to provide support, the 0.9780 support level has provided a launch pad for an ascent.

EURCHF Major Zones

Demand Zones: 0.9780, 0.9700, 0.9650
Supply Zones: 0.9970, 1.0020, 1.0090

EURCHF Long-term Trend: Bullish

Ever since the formation of the swing high at the 1.0090 resistance level, lower highs have followed in an orderly manner on the daily chart. Except for the higher low formed in March as a result of the support of the mid-trendline within the parallel channel, lower highs have formed since the formation of the swing low in January. The well-assembled candlesticks on the 24-hour chart have formed a descending parallel channel to guide the gyration of the daily candles.

The middle trendline within the descending channel hindered the descent from the upper border for about three days at the beginning of February. The price yielded to the Parabolic SAR (Stop and Reverse) to sink further until the lower border was stuck. The mid-trendline line has also provided support to bounce the price back to 0.9970, which led to the formation of a double top.

EURCHF Short-term Trend: Bullish

The sudden surge in the EURCHF market has led to a shift in market structure. The price would likely soar toward the next supply zove of 0.9970.

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