EUR/CHF recently busted through an ascending trend line but appears to be in correction mode from its reversal attempt.
Are more sellers ready to jump in soon?
Check out these potential resistance zones on the 4-hour time frame.
EUR/CHF: 4-hour
EUR/CHF 4-hour Forex Chart Faster with TradingView
Fiscal uncertainty in France ahead of the elections weighed sharply on the shared currency earlier this week.
At the same time, safe-haven flows continued to favor the lower-yielding Swiss franc while traders steered clear of the dollar ahead of the FOMC minutes.
Can EUR/CHF sustain its selloff from here?
EUR/CHF is pulling up from its steep dive below an ascending trend line that had been holding since July.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The pair seems to have hit a ceiling at the 38.2% Fib around the Pivot Point (.9360) but has yet to form new lows, so the retracement could still be in play.
A larger correction could test the 50% Fib at .9374 or the 61.8% level closer to the broken trend line and the dynamic inflection points at the moving averages. The 100 SMA looks ready to cross below the 200 SMA to reflect a pickup in selling pressure.
With that, look out for reversal candlesticks at any of the Fib levels, as a continuation of the slide could drag EUR/CHF back to the swing low at .9260 or to the next potential bearish target at S1 (.9230).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
EUR/CHF is pulling back to test the falling trend line it just broke, and it can be tricky to tell whether a retest like this is a buying opportunity or the start of a failed breakout. Premium members can read our lesson:
📖 The Break-and-Retest: A Higher-Probability Breakout Entry
Reading this helps you understand why waiting for a retest filters out many breakout traps, what price action to look for when a broken level is tested from the other side, and how to plan entries and stops around a pullback like this one.
And if you’re not a Premium subscriber yet, consider joining today.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just where a breakout happened, but whether the retest that follows is likely to hold.
