Previous: GBP/CHF Trading in a Declining Wedge with Next Key Support at 1.4222 (1/26)

GBP/CHF

After breaking a declining wedge, the GBP/CHF is seen in a rising channel/wedge in the 4H chart. The bearish momentum was barely killed as the RSI rose above 60, but did not tag 70. Price is trading around the 200 simple moving average in this 4H chart. Now it is trading at the wedge support. A break below opens up the  1.4430-1.4450 pivot zone. Below that we open up the low near 1.4335. Otherwise, the bullish continuation target in the short-term is 1.4620 (61.8% retracement of the declinine wedge) and the pivot area just above that.

Let’s take a closer at this test of trendline support in the 1H chart.

The 1H chart shows very heavy price action in the early going of the 2/7 US session. It basically engulfed the European session rally. It should also be noted that the RSI has remains above 40 after tagging 70, but it has not sustained a push back above 60. This means although the bias is still bullish, the momentum has really flattened out in consolidation mode. A break below 40 can help confirm the bearish breakout toward 1.4450 and 1.4335. But as we saw in the 4H chart, there is still upside risk toward the next pivot area at and just above the 61.8% retracement level of 1.4620.

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Fan Yang CMT is the Chief Technical Strategist for IBTRADE, educator trader 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.