EURCHF Trading Volume Normalizes Amid Market Correction

Market Analysis – August 13

The EURCHF currency pair began the year with a double-bottom reversal pattern, leading to a bullish trend. This trend was evident as daily candles consistently positioned above the 50-period and 80-period Moving Averages. Currently, the market is undergoing a retracement within the well-established downward trend.

EURCHF Key Levels

• Demand Levels: 0.93150, 0.92540, 0.90000
• Supply Levels: 0.95210, 0.97010, 0.98850

EURCHF Long-Term Trend: Bearish

A decline in price below the 50-period and 90-period Moving Averages in June indicated a shift in market direction. The breach of the demand level at 0.97290 further confirmed the bearish sentiment.

Following this decline, the price briefly stabilized upon testing the bullish trendline, leading to a temporary rise. However, the previous demand level of 0.97290 acted as resistance, resulting in the formation of a double top. This resistance, combined with the Moving Averages, contributed to a significant shorting opportunity, which pushed the price below the supporting trendline.

EURCHF Short-Term Trend: Bullish

The pronounced price drop was accompanied by a notable increase in trading volume, as seen on both the daily and 4-hour charts. This surge in volume may reflect traders capitalizing on breakouts. The market has now approached the supply zone at 0.95210. The trading volume is normalizing as the retracement, a bullish correction that started on the higher timeframes, continues. A Change of Character (ChoCh) on the lower timeframes is anticipated, potentially providing the best forex signals.