EURCHF: Unveiling Extreme Weakness – Is a Bearish Reversal Looming?

Market Analysis – July 5

EURCHF exhibits signs of extreme weakness despite a previous bullish market shift observed on June 23rd, characterized by a significant bullish candle. Since the market reversal, the price has struggled to sustain upward momentum.

Key Levels for EURCHF:

Demand Levels: 0.9680, 0.9740, 0.9640
Supply Levels: 0.9820, 0.9860, 0.9900

Long-term Trend for EURCHF: Ranging

EURCHF displayed a clear intention to establish a bullish trend. This was evident in the invalidation of a bearish order block by three consecutive white soldiers at the beginning of June. Additionally, a failure swing occurred as the market failed to create a lower low. Furthermore, a strong bullish surge on June 12th further confirmed the bullish shift in market structure.

#EURCHF SSI is at 6.78

Risk Warning: Losses can exceed deposits.
Disclaimer: Past performance is not indicative of future results. pic.twitter.com/5WfPgaPqPX

— FXCM Market Data (@FXCM_MarketData) July 5, 2023

However, a bearish reversal pattern known as the head and shoulders pattern has emerged, countering the previously established bullish market structure. This pattern indicates the weakness of the price and the potential for a reversal.

Short-term Trend for EURCHF: Ranging

On the lower timeframe, a rough pattern is observed where highs and lows are being swept in a random manner. The trend is not clearly defined, making it unsafe to forcefully determine a direction in the market during this period.

Traders and investors should exercise caution and closely monitor the price action. The extreme weakness observed and the emergence of the head and shoulders pattern suggest a potential reversal in the market. It is advisable to await further confirmation and clearer market conditions before making trading decisions in EURCHF.

Do you want to take your trading to the next level? Join the best platform for that here