EUR/CHF Price Analysis: Eyes recovery rally with triangle breakout on 1H
- EUR/CHF's hourly chart is reporting a triangle breakout.
- The RSI on the 4-hour chart has diverged in favor of the bulls.
- A corrective bounce could be in the offing.
EUR/CHF's sell-off seems to have run its course and a corrective bounce could be in the offing, technical charts indicate
To start with, the hourly chart shows a symmetrical triangle breakout, a bullish reversal pattern.
Further, the 4-hour chart relative strength index (RSI) has produced a bullish divergence, which occurs when the indicator prints higher lows, contradicting lower lows on price.
A bullish divergence indicates seller exhaustion and often paves the way for a corrective bounce. What's more, the 14-day RSI is reporting oversold conditions with a below-30 print.
So, it appears as though the sell-off the December 2019 high of 1.1027 has run out of steam at 1.0729 - the 33-month low reached on Monday.
The pair may rise to the descending 10-day average at 1.0771. The bearish view would be invalidated only if the spot manages to close above that bearish MA.
Trend: Oversold bounce