EURCHF Retracement is Imminent as Price Becomes Overbought

Market Analysis – May 22

EURCHF has successfully breached the tightly defended supply zone at 0.9840. The market has shown a steady ascent from the demand level of 0.9550, overcoming the resistance zone. A pullback appears imminent, as indicated by the Stochastic oscillator, which reveals that the price is overbought.

EURCHF Key Levels

• Demand Levels: 0.9840, 0.9550, 0.9470
• Supply Levels: 1.0000, 1.0080, 1.0100

EURCHF Long-term Trend: Bullish

The EURCHF market is currently displaying a bullish trend. The recent movement has seen the price break above the resistance level of 0.9840, a level that previously acted as a significant hurdle. The daily candles positioned above the Moving Average cross confirm the ongoing bullish stance.

The relative equal highs and swing highs on the sell side feature rich liquidity, making them prominent price targets for further bullish movement. However, the Stochastic indicator suggests that the market is overbought, signalling a potential retracement.

EURCHF Short-term Trend: Bullish

In the short term, the EURCHF also maintains a bullish trend. The Stochastic oscillator on both the daily and four-hour charts indicates overbought conditions. This correlation suggests that a pullback is likely, which could provide an optimal entry point to generate the best forex signals.

The price may find support upon a retracement to the breaker block of 0.9840 to resume its bullish run. Waiting for this pullback is crucial for achieving a favourable risk-to-reward ratio.

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