The price of EURCHF has come into the major lows, will price offer a short term reversal opportunity?
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The EURCHF price has retested the major swing lows from the monthly time frame, this could see the price reverse in the short term. Fundamentally, there was a divergence between the ECB and SNB. The Swiss National Bank acted before the ECB in hiking rates, this saw the price of EURCHF fall. The ECB’s lack of hikes has come under scrutiny and has caused the EURO to weaken significantly. This weakness does not look likely to end any time soon but, it doesn’t mean we won’t see relief rallies in the price.
The price retesting the monthly level could offer a reversal opportunity. Looking at the 4hr time frame and adding an RSI indicator, we can see that the price is forming a lower low, but the RSI is making a higher low. This shows bullish divergence in the price, when this forms we can often see a short term reversal.
Did you see our GBPUSD analysis? You can see it here.
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