EUR/CHF Price Prediction: Risks further downside to target despite Hammer candle
|- EUR/CHF might continue to decline towards the initial target generated by the Triangle pattern formed between August – October.
- A textbook bullish Hammer reversal candle was not confirmed and downside risks remains.
EUR/CHF recovers after declining following a breakout from a Triangle pattern that started forming in August and completed in November (see chart).
The pair reached lows of 0.9204 on November 22 but promptly recovered to form a bullish reversal candlestick pattern called a bullish Hammer (green rectangle on chart below).
EUR/CHF Daily Chart
Despite being a classic example of a Hammer, the candle on EUR/CHF failed to gain bullish confirmation as it was not succeeded by a green up candle on the following day.
Since then the market has been going sideways.
There is still a risk EUR/CHF could resume falling again. It has not yet reached the conservative downside target for the Triangle at around 0.9146 (red dashed line), the 61.8% Fibonacci extrapolation of the height of the Triangle lower, and it is possible it may still fall down to that target in time.
A break below the Hammer’s lows at 0.9204 would increase the likelihood of the target being achieved.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.