- EUR/CHF’s daily chart shows a golden cross, a bullish but lagging indicator.
- A move above 1.0838 is needed to confirm a bullish breakout.
EUR/CHF is trading in the green on Monday with the daily chart flashing a golden crossover, a long-term bull market indicator.
The golden cross is the bullish crossover of the 50- and 200-day simple moving averages (SMAs). The indicator, however, is based on backward-looking moving averages and has limited predictive powers at best. The indicator often traps buyers on the wrong side of the market.
In other words, the bull cross confirmed on Friday does not necessarily imply a stronger rally. Moreover, a sustained move above 1.0838 is needed to signal a continuation of the rally from July lows near 1.06. That’s because the pair faced rejection at 1.0838 multiple times in the past two weeks.
While 1.0838 is the level to beat for the bulls, a move below 1.0712 (July 24 low) is needed to strengthen the bear grip around the currency pair. At press time, the pair is trading at 1.0770, representing a 0.16% gain on the day.
Daily chart
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Trend: Neutral
Technical levels
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