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Bearish Retracement Could Develop Following Strong Resistance Reaction
Forex
Economic
Summary:
The repeated inability to break decisively above this zone has reinforced its importance as a major local resistance level.
Sell
TradingEURCHF
EXP
0.94122
Entry Price
0.92640
TP
0.95500
SL
0.93881 -0.00032 -0.03%
0
Point
Flat
0.92640
TP
CLOSING
0.94122
Entry Price
0.95500
SL
European officials have warned about the possibility of increased Russian drone and missile operations, as well as sabotage and cyber activities targeting NATO countries that continue to support Ukraine in the months ahead. The latest warning came from French President Emmanuel Macron, who stated on Friday that the hybrid threat posed by Russia to both France and Europe has intensified in recent months.
At the same time, geopolitical tensions in the Middle East remain elevated. Iran-backed Houthi forces in Yemen claimed over the weekend that they had launched missile and drone attacks against sensitive locations in Riyadh, the Saudi capital. Meanwhile, Iran outlined seven conditions for resuming negotiations with the United States, underscoring the ongoing uncertainty surrounding the region and its potential implications for global markets.
In Europe, the European Central Bank (ECB) cautioned that inflationary pressures may persist longer than previously expected, reinforcing expectations that monetary policy could remain restrictive for an extended period.
ECB President Christine Lagarde reiterated that future interest rate decisions will continue to depend on incoming economic data and will be assessed on a meeting-by-meeting basis rather than following a predetermined policy path.
Political developments in Germany also remained under close scrutiny. The far-right continued to gain support after securing victory in Mecklenburg-Vorpommern against the center-right CDU. Although the Alternative for Germany (AfD) delivered another setback to Chancellor Friedrich Merz’s political bloc, it was unable to secure a win in Berlin, where the left-wing party Die Linke emerged as the leading political force for the first time.
In Switzerland, inflation remains close to the lower end of the Swiss National Bank’s price stability range, strengthening the argument for maintaining the policy rate at 0%. Financial markets broadly expect the SNB to leave interest rates unchanged when it announces its monetary policy decision on Thursday.
A survey released on Monday showed that all 35 economists polled expect the SNB to keep its policy rate unchanged at 0% on September 24. Furthermore, sixteen of the twenty-four economists surveyed anticipate that the central bank will maintain rates at current levels through at least 2027, reflecting expectations of a stable monetary policy environment over the coming years.
Technical Analysis
EURCHF has repeatedly reacted lower after reaching the 0.9467 level, an area that had not been tested since April 7. The repeated inability to break decisively above this zone has reinforced its importance as a major local resistance level. Multiple rejection candles have formed around this area, suggesting that sellers remain active and that a corrective move to the downside may be beginning to take shape.
If the correction continues to develop, the next significant objective could be located near 0.9264. This area gains additional technical relevance because it aligns closely with both the 100-period and 200-period moving averages, currently positioned at 0.9273 and 0.9233 respectively. These moving averages are clustered near the same region as the 0.50 and 0.618 Fibonacci retracement levels, creating a strong confluence zone that could act as a magnet for price in the event of a more extended bearish correction.
Looking at momentum indicators, the Relative Strength Index (RSI) is currently positioned near 52 and is gradually approaching a move back into bearish territory. Such a development could contribute to an acceleration of downside momentum. This follows a recent advance to 71.48, where the RSI entered overbought territory and helped trigger the current corrective phase. The indicator now suggests that bullish momentum has moderated significantly from its previous extremes.
Meanwhile, the MACD is displaying a bearish histogram that is beginning to gain depth, indicating that downside momentum is gradually strengthening. Although the signal lines remain in bullish territory, the current configuration continues to support the view that the move lower is primarily a corrective retracement rather than a complete trend reversal. Unless momentum indicators begin to establish themselves firmly in bearish territory, the broader structure still favors interpreting the current decline as a pullback within the larger upward move.
Trading Recommendations
Trading direction: Sell
Entry price: 0.9412
Target price: 0.9264
Stop loss:0.9550
Validity: Oct 02, 2026 15:00:00
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