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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.
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