• EURCHF extends recovery to a fresh 2-month high

• Breaks above trendline but long-term downtrend remains intact

• Momentum indicators tilt to the positive side

EURCHF has been in a downtrend since the beginning of 2023, dropping to an all-time low of 0.9252 on December 29. However, the pair has been staging a rebound in 2024, violating the downward sloping trendline that connects its lower highs in the past year and posting a fresh two-month peak last week.

Considering that both the RSI and MACD are skewed to the upside, the pair could revisit the two-month peak of 0.9510. A break above that region could set the stage for 0.9574, which is the 38.2% Fibonacci retracement of the 1.009-0.9252 downtrend. Surpassing that zone, the price may challenge the 50.0% Fibo of 0.9674, a region that held strong both in September and November.

Alternatively, if the price reverses back higher, immediate support could be found at the 23.6% Fibo of 0.9451. Sliding beneath that floor, the price might descend towards the December support of 0.9402, which overlaps with the 50-day simple moving average (SMA). Even lower, the February low of 0.9304 could prevent further downside.

In brief, EURCHF has been in a recovery mode since the beginning of the year, but the long-term downtrend remains intact. Therefore, a break above the 200-day SMA is needed for the bulls to regain some confidence about a full-scale reversal.