The CHF has been tracking the EUR since the SNB “pegged” the CHF to EUR. As EUR/USD falls, we are also seeing a rally in USD/CHF.
The daily chart shows the EUR/USD completing a double bottom as price breaks above the 0.8952 resistance. Also note that price is pushing above the 200-day SMA, another sign that the market is shifting away from the prevailing bearish mode.
The double bottom is a sign that the market is sideways. Note that the oscillators are starting to show overbought condition in the daily chart.
If after the break above 0.8952, there is a pullback, the ability to hold above the middle of the bottom pattern (around 0.8850), would establish a higher low, and thus add to the case of a bullish trend developing.
The weekly chart shows that the market is sideways. Direction is unclear, but the mode could be just a consolidation after a swing from 0.7070 to 0.9970.
Bullish within consolidation:
In this consolidation scenario, the break above 0.8952 opens 0.9158 resistance pivots, and a falling trendline from April 2013.
There is still downside risk toward the 0.8570 support/resistance pivot.If price falls back below 0.8850, the market might put the focus back on 0.87, and then 0.8570.
Earlier: Gold (XAU/USD) Threatens Triangle Resistance
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