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The EURCHF pair is back towards the 1.003 level as the euro starts to gain temporary strength on the foreign exchange market after coming under attack across the board.
Traders sold the EURCHF pair after Ukraine crisis provided a powerful combination of demand for the Swiss franc and fear towards holding the single currency
Additionally, other euro crosses have been experiencing long-term weakness, such as the EURUSD and EURGBP, adding further downside pressure on the single currency.
The technicals show that a falling price channel pattern is forming, and the more upside failure at the top of the pattern certainly hints at coming test towards the bottom of the pattern, well under parity.
In terms of bearish targets, the 1.000 level appears to be the first major target, although the size of the mentioned triangle is projecting much greater losses if a genuine breakout happens towards the 0.9100 level.
The fundamental backdrop is currently not supportive for further EURCHF gains as well. This is to say that the interest rate and policy divergence between the FED and the ECB is widening, and the Ukraine war not being resolved.
Bullish sentiment is also starting to drop, as traders start to become frustrated with the lack of upside breakthrough over recent days.
Negative sentiment has dropped since last week to 41 percent, from a high of 58 percent last week. This relatively neutral sentiment bias is likely to signal more range bound trading for the EURCHF in the short-term.
EURCHF Short-Term Technical Analysis
The four-hour time frame continues to show that the EURCHF pair is falling after breaking through the neckline of a head and shoulders pattern, around the 1.0300 level.
Additionally, the bearish head and shoulders pattern has largely played out to the downside, next big directional price move will be monumental in terms of the short-term the trend front.
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EURCHF Medium-Term Technical Analysis
Looking at the daily time frame, we are currently seeing a big rejection from the top of a falling price channel around the 1.2000 level.
The EURCHF pairs looks to be headed much lower, and the bottom of the channel is currently located around the 0.9100 level, which appears to be the next bearish target while the price remains capped under the 1.1000 level.
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