The correction seems close to completion, the bull run is likely to resume

• EUR/CHF has seen a correction over the past four days.
• This move now appears almost complete and a resumption of the previous bullish move is likely.

EUR/CHF pulls back amid rally. Despite the overall bearish trend in the medium term, the pair is showing signs that it could push higher in the short term.

EUR/CHF daily chart

EUR/CHF formed a Bullish Engulfing Japanese candlestick pattern on the day it bottomed on September 11 (shaded rectangle). This happens when the price hits a new low in a downtrend, reverses on the same day and closes higher. When the body of the recovery candle engulfs – or “swallows” – the entire body from the previous day, it is known in technical analysis as Bullish Engulfing. The next day was a green day, adding confirmation for Bullish Engulfing. The whole pattern is a bullish signal in the short term.

Shortly after the recovery, the pair pulled back on September 12, however, the correction was shallow and appears to have charted a vague three-wave corrective pattern. This suggests that the bullish rally is likely to resume. Also, the patch seems close to completion.

A break above 0.9434 (September 12 high) would confirm a higher continuation, with the next target being 0.9464, followed by 0.9513 in case of a particularly bullish move.

A break below 0.9369 would likely invalidate the bullish hypothesis and suggest a more neutral or bearish outlook.