EURCHF Has Broken Through the Flag Formation

Price Analysis – EURCHF Has Broken Its Way Out of Flag Formation

EURCHF has broken through the flag formation with bullish momentum. The market began the year in a consolidation pattern, which began on November 10, 2020. By the 18th of February 2021, the price broke out and jumped from 1.0807 support to around 1.1080 key level in an upthrust. The market then experienced some retracement before shooting even higher past the 1.11200 key level.

At this point, the bulls became weak, and the price entered into a downtrend, albeit in a bullish-continuation flag formation. The market, therefore, moves in an undulating pattern down the flag channel, to lower highs and lower lows. On the 23rd of June 2021, EURCHF made contact with the upper border of the flag channel, and though it was rejected, it persistently kept testing the upper border.
After five trading days of testing the upper border of the flag channel, EURCHF finally broke through on June 30th, 2021. It remains to see if the price breakout is genuine, but it has now returned to test the upper border of the flag channel.

The 9MA (Moving Average), which has hitherto been operating in the middle of the channel, has followed the candles to the border of the flag channel and remains under the candles as support. The Stochastic Oscillator also shows a break in the market trend. The signal lines, which were only undulating from about the 70 mark to the oversold region, have now moved to the border of the overbought region.

EURCHF Significant Zones

Resistance Zones: 1.11200, 1.10800, 1.10300
Support Zones: 1.09300, 1.08700, 1.0807

What to Expect as EURCHF Breaks Through the Flag Formation

On the 4-hour chart, the market has struck the support border and a new bullish candle has emerged in an upwards movement.
The 9MA is behind the candles and points down to reflect the price retest on the upper border of the flag channel. The Stochastic oscillator, however, has dropped into the oversold region, which means a bullish move is imminent. If the break-out is false, EURCHF will fall back into the flag channel to wait for another opportunity to strike.

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