EURCHF Retraces Into Premium to Resume Downtrend

EURCHF Analysis – Market Retraces Into Premium to Resume Downtrend

EURCHF retraces into premium to resume downtrend. The market’s direction on the daily chart has been bearish for months. As prices keep declining to the downside, the market breaks every weak support in its way. The aggressive fall to the downside led to the further breaking of the market structure to the downside. Since July 25th, 2022, the market has remained within the 0.9870 and 0.9530 resistance and support levels, respectively.

EURCHF Significant Zones

Demand Zones: 0.9600, 0.9530

Supply Zones: 0.9790, 0.9870

On the 11th of July, 2022, the dominance of the EURCHF sellers in the market was revealed as they suppressed all buying pressure around the 0.9870 previous support level. A break in the market structure could also be seen immediately after the previous support was successfully broken to the downside. Due to the break in market structure, more EURCHF sellers joined the market trend as they kept on riding the impulse wave to the downside.

Until August 23rd, 2022, the EURCHF sellers completely dominated the market as the buyers were unable to shift the market structure to the upside. On the 23rd of August, 2022, the 0.9530 demand zone rejected the market to the upside, giving the bulls a signal to invade the market with their buy orders. A shift in the market structure occurred at this point, and the market rallied up into a liquidity pool above the August high. After the buy stops liquidity above the high was taken, and the market reversed at the supply zone of 0.9870 down to the local low.

Market Expectation

The market continues to rally in the four-hour time frame after clearing liquidity below the local low of 0.95527. A successful shift in market structure to the upside might result in a short-term rally to the upside relative to the higher timeframe. With the 0.9870 and 0.9530 levels being the market range, EURCHF is expected to run through all the internal liquidity below the equilibrium (50% retracement level) of the range, as it enters into the premium before crashing downward.

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