The GBP/CHF has been range trading since September 28 up until October 19 when the price broke below the key support near 1.1770 as well as the uptrend trendline. However, after the breakout price went up sharply and cleanly rejected the 50% Fibs at 1.1909 while bouncing off the downtrend trendline at the same time.
GBP/CHF could have produced a very top, before continuing to print lower lows and lower highs. As long as the price remains below 1.1916, the downtrend is highly likely to continue resulting in a 180 pips drop. This is because the key support could be located at 1.1627, which is confirmed by 88.6% and 661.8% Fibonacci retracement levels. At the same time, the support corresponds to the average-price uptrend trendline, suggesting that the downside target could be reached as soon as November 2 or 3.
Today GBP/CHF is rejecting the 50 Simple Moving Average and already bounced off the 38.2% Fibonacci resistance level at 1.1836. It seems that the downtrend might start to accelerate and there won’t be any major pullbacks from this point onwards. Nonetheless, as long as the downtrend is valid, the worst-case scenario is that 50% Fibonacci resistance will get re-tested once again, before/if a major decline will take place. Although considering today’s price action, it holds little probability. On the upside, only 1h and/or 4h close above 1.1916 will completely invalidate the bearish scenario and GBP/CHF should be establishing an uptrend.
Key support levels: 1.1770, 1.1627
Key resistance levels: 1.1840, 1.1916
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
GBP/CHF could have produced a very top, before continuing to print lower lows and lower highs. As long as the price remains below 1.1916, the downtrend is highly likely to continue resulting in a 180 pips drop. This is because the key support could be located at 1.1627, which is confirmed by 88.6% and 661.8% Fibonacci retracement levels. At the same time, the support corresponds to the average-price uptrend trendline, suggesting that the downside target could be reached as soon as November 2 or 3.
Today GBP/CHF is rejecting the 50 Simple Moving Average and already bounced off the 38.2% Fibonacci resistance level at 1.1836. It seems that the downtrend might start to accelerate and there won’t be any major pullbacks from this point onwards. Nonetheless, as long as the downtrend is valid, the worst-case scenario is that 50% Fibonacci resistance will get re-tested once again, before/if a major decline will take place. Although considering today’s price action, it holds little probability. On the upside, only 1h and/or 4h close above 1.1916 will completely invalidate the bearish scenario and GBP/CHF should be establishing an uptrend.
Key support levels: 1.1770, 1.1627
Key resistance levels: 1.1840, 1.1916
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.