EURCHF witnessed bullish momentum in the early part of November, pushing prices past the €1.08 area. A period of consolidation resulted in a spike at monthly highs aided by a hidden bullish divergence.
However, since then, bears have entered the market as profit-taking is evident. Prices are finding somewhat of support at the 38.2% of the 1.0871/1.0658 downside Fibonacci leg.
If the specified support holds, we could see another attempt at the recent highs. However, a breakthrough the 38.2%, will provide room for a test at 50% and then 61.8% going forward.
A shorter-term outlook on the currency pair shows that the bias is currently on the upside. A bounce at the recent lows has propelled prices, with the lower border of the Ichimoku cloud being the next target.
Further positivity on the momentum indicator could form a substantial bullish divergence, which could once again test the recent double top in the mid-€1.08 range.
This suggests that bulls are becoming more confident in the short term, as a move to the upside would cement another test to monthly highs.