EURCHF is trading sideways today, a tad above the new 2023 low of 0.9521 recorded on July 27. This was the lowest print of the pair since September 29, 2022 as the bears finally staged their much-anticipated breakout from the 10-month-old rectangle.

However, the good news for the bears appears to stop here as the momentum indicators are gradually turning in favour of the bulls. More specifically, the Average Directional Movement Index (ADX) traded to the highest level since December 2021, but it is now moving aggressively lower. This could be seen as a sign that the recent bearish trend has run its course. Similarly, the stochastic oscillator is preparing to rise above its oversold territory. If this move actually takes place, it could be a strong signal for the start of a bullish move.

Should the bulls feel inspired by the momentum indicators, they would like to reclaim the key 0.9650-0.9665 range that is defined by the January 15, 2015 low and the 23.6% Fibonacci retracement of the June 9, 2022 – September 26, 2022 downtrend respectively. Even higher, the 0.9706 area, populated by the November 14, 2022 low and the 50-day simple moving average (SMA), should prove stronger to overcome. If successful, the bulls could start thinking about pushing EURCHF back inside the recent rectangle.

On the flip side, the bears look determined to push EURCHF even lower. The first obstacle appears to be the August 23, 2022 low at 0.9552 and the recent 2023 low at 0.9521. Breaking these levels would mean that the door would be wide open for a more sizeable move towards the 0.9403 area, and the chance to record a new all-time low. 

To sum up, the bears remain in control of the market but there is increasing bullish pressure which could quickly gain traction if the bulls stage a rally above the 0.9665 area.