EURCHF is trading at a new 2023 low as the breakout from the 10-month-old rectangle appears to be valid. This is the lowest EURCHF print since September 30, 2022 with the pair not being very far from the all-time low of 0.9403. Bearish pressure has been dominating the price action since mid-January 2023, with the bulls appearing unable to stage a significant recovery, particularly after the mid-March events.

In the meantime, the Average Directional Movement Index (ADX) confirms the strength of the current downleg as it trades to the highest level since late-April. Crucially, the stochastic oscillator remains stuck in its oversold territory and exhibits a tendency to record a lower low. This indicator can stay in this region for a while. A valid bullish breakout is needed for the market to start considering a possible reversal in EURCHF.

Should the bears decide to push EURCHF even lower, the first target standing in their way is the August 23, 2022 low at 0.9552. If successful in breaking this level, the door would then open for a more sizeable move towards the 0.9403 area, and the chance to record a new all-time low.

On the other hand, the bulls are probably frustrated by their inability to record a decent rally. 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 0.9706-0.9724 area should prove stronger to overcome, but if successful, the bears could then have a go at pushing EURCHF back inside the aforementioned rectangle.

To sum up, the bears remain in control of the market with the momentum indicators on their side. However, any sign of complacency is bound to be picked upon by the bulls as they are desperate for a rally towards the 0.9706 area.