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EUR/CHF Price Analysis: Parity in Sight as Trend Reversal Gains Momentum

EUR/CHF trades near 0.9847, extending its bullish trajectory on both short-term and intermediate timeframes. With key trendlines broken, moving averages crossed, and parity within reach, the path has cleared for further gains.

Trend Reversal Signals Gain Strength

EUR/CHF has broken above all major moving averages and a significant downtrend trendline, signaling a potential reversal of the previous bearish bias. The pair’s formation of consecutive higher highs and higher lows since January’s reversal indicates a burgeoning bullish trend on the daily chart, which is typically used to assess the intermediate (3-6 month) outlook. Consistent with the adage “The trend is your friend,” this uptrend is expected to continue.

Parity: The Next Target

The next major resistance level lies at parity (1.0000), suggesting the pair could experience an unimpeded rally towards that psychological barrier.

Technical Indicators: Bullish with a Hint of Caution

The 50-day Simple Moving Average (SMA) has crossed above the 100-day SMA, a bullish signal, and has recently surpassed the 200-day SMA, although with less reliability due to the longer-term average still being in slight decline.

While the Relative Strength Index (RSI) lies in overbought territory above 70, indicating a potential pullback, it wouldn’t be sufficient to reverse the prevailing uptrend. A cross below 70 would offer a stronger sell signal and potential correction signal.

Long-Term Outlook: Still Evolving

The weekly chart shows a longer-term trend that remains undecided. While a recovery has been initiated, the trend direction is still ambiguous. However, the strength of the recent rebound hints at a potentially bullish confirmation in the near future.