EURCHF has seen choppy price action for the last 6 months as the current engulfed channel shows some signs of accent.
Continuous divergences on the momentum indicator have led prices to the lower and bottom borders in rapid succession.
Currently, we find resistance at the mean, leading to Ichimoku cloud consumption as the trend bias continues to the downside. Any attempt for another move towards the mean would need a bounce at the lower border of the cloud.
We could then see a rise in prices, past the mean and another attempt at the top border for fresh highs.
A short-term outlook sees momentum waning as prices fall lower from monthly highs.
However, a recent bounce at the golden ratio of the 1.0750/1.0846 Fibonacci leg has given impetus towards the upside.
Prices are now aiming for the 50%, which is a confluence of the psychological 1.08 handle.
Should the specified level be broken, then this would make way for the 38.2%, which would then recapture recent highs.
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