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GBP/CHF
The GBP/CHF has been trading sideways since finding resistance at 1.48. The trend prior to consolidation has been bullish from 1.1460 to 1.48. Part of the reason for this jump was the SNB stepping in to intervene, pressuring the CHF. In this bull-run, the market started to trade in a rising channel seen in the daily chart, starting in September 2011. It is now testing the rising trendline that extends back to September.
Bullish Scenario: If the market bounces off this rising trendline, and pushes above the common resistance pivot established recently just below 1.46, the market opens up a bullish scenario back to at least 1.48. Further bullish continuation can be confirmed if the daily RSI pushes back above 60 after failing to break below 40.
Break of Trendline Scenario: If there is a clear break below the channel, and a subsequent pullback fails to push back above 1.44, while pushing below 1.4220, we have a likely bearish outlook in the short to medium term. 1.40 would be the first target, also near 23.6% retracement and the 200 day simple moving average. Further bearish confirmation would open up 1.3524 (38.2% retracement and a previous support pivot.)
One such confirmation would be a break of the RSI below 40 in the daily chart. Below 30 would help confirm even further bearish momentum, but for now, the 1.3524 level should be the maximum bearish outlook.
This analysis is of a snapshot of the market and the anticipation based on the current conditions. Things may change, and adjustments are often needed especially when preparing for a trade. To follow up and explore trading plans and risk management techniques as well as fundamental bias and event risks, don’t miss IBTrade’s daily Market Intelligence Briefings live at 8:00AM EST throughout the week. To gain free access to these sessions, register at here at IBTrade. You will receive and email with the link and password before each session once you have registered.
Fan Yang CMT is a forex trader, analyst, educator for IBTrade; and main contributor for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.
