The week of 14 Feb 2022 GBPCHF – Risk 1 to get 5??
The 200 DMA is said to be a good guide to a bullish/bearish bias and quite often it acts as a dynamic support/resistance. Not always, but often!! Together with the S/R zone around 1.2530 it held price on 3 occasions in the recent past on this pair.
The market appears not to accept higher prices and several daily candles have been held in this zone. If they did succeed to break above, this was quickly reversed. Add to that the fact that the Friday rumor of imminent Russian attack on Ukraine saw a strengthening of JPY, CHF and to some extent, the USD, I remain bearish on this pair. However, nothing is ever 100% in trading and I note that the last rejection from the s/r zone (marked 2) was shallower than the previous (marked 1) and we do see a higher low. That is why we have a stop and hence the reminder of risk in the title of my post.
So, what do I expect next week?
The rumor of Friday came when the European markets had closed so we may see a gap. In that case, we have to wait for stability and re-evaluate the entry point. As at now, I think that a small retracement above the s/r level may happen before the bearish move is possible. I will look to take half position at market open and look to add the remaining if a pullback occurs. Stops have to be above the recent high around 1.2610. For target we could aim for 1.2300 and then just above the next major support at 1.2140. Having 2 positions with different targets does seem as the way to go.
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The market appears not to accept higher prices and several daily candles have been held in this zone. If they did succeed to break above, this was quickly reversed. Add to that the fact that the Friday rumor of imminent Russian attack on Ukraine saw a strengthening of JPY, CHF and to some extent, the USD, I remain bearish on this pair. However, nothing is ever 100% in trading and I note that the last rejection from the s/r zone (marked 2) was shallower than the previous (marked 1) and we do see a higher low. That is why we have a stop and hence the reminder of risk in the title of my post.
So, what do I expect next week?
The rumor of Friday came when the European markets had closed so we may see a gap. In that case, we have to wait for stability and re-evaluate the entry point. As at now, I think that a small retracement above the s/r level may happen before the bearish move is possible. I will look to take half position at market open and look to add the remaining if a pullback occurs. Stops have to be above the recent high around 1.2610. For target we could aim for 1.2300 and then just above the next major support at 1.2140. Having 2 positions with different targets does seem as the way to go.
If you like my analysis, please give it a “thumbs up” and follow me to get immediate notifications.
Always use sound money and risk management in all your trades.
Comment:
This trade is still active, not much movement to the downside yet. Good thing is the stop was never threatened and a week later a short seems the way to go.
