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The EURCHF is approaching a key resistance area at 1.0970.
I wrote about this level in Sunday’s forecast.
So far, the idea remains the same, which is to watch for a rejection from 1.0970 over the coming sessions.
Notice too how EURCHF bounced from the 1.0870 area on Monday.
That 1.0870 level is the support I pointed out in Sunday’s forecast.
But I’m not in a hurry to short EURCHF. Nor will I sell the pair on the first retest of resistance.
As I stated on Sunday, I want to see the pair consolidate below 1.0970 just like it did at 1.1160 and 1.1060 in July.
In other words, I want to see selling pressure at 1.0970 before I commit.
And the longer this short-term downtrend lasts, the more hesitant I will be about shorting EURCHF.
No trend lasts forever, and this stair-step price action may not last much longer.
At some point, sellers are going to get trapped below one of these levels which will likely trigger a squeeze similar to the one we just saw from EURUSD.
For now, though, I’ll be focusing on how EURCHF responds to 1.0970 resistance.
A rejection from it would likely take the pair back to 1.0870 support and perhaps 1.0790.
Alternatively, a daily close above 1.0970 would be viewed as bullish and would re-expose the 1.1060 region.
I’ll remain somewhat neutral until I see what happens at 1.0970.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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