Bearish Divergence On EURCHF
FХ Strategist & Financial Commentator
After building a bullish base around 1.05 area between April and the first half of May, a rising swing started, pushing the quotes towards 1.0720 area nearby the previous resistance zone, where a triple top formation was generated in the beginning of the month of March.
During Friday’s session by the way, after setting a new monthly top, this pair has showed a strong correction forming a wide shooting star candle, that brought the prices back to 1.0690 area.
Taking a look at the RSI indicator, we can detect a perfect bearish divergence that could anticipate a technical correction, especially with a short term outlook. The Average True Range, on the other hand is rising up again during the past two weeks so most probably this pair should be pretty active during June.
The bearish setup would be activated in case of a breakdown of last Thursday’s bottom at 1.0650, with a stop loss to place at 1.0750 above last February highs, while the target price could be expected around 1.0550 area, testing the accumulation base generated between March and April.
As always I recommend to trade carefully and to plan at best every move. Don’t forget to subscribe to NBHM’s YouTube Channel to stay up to date with the financial markets! Have a good trading and see you for the next video.