Background
We are going to move away from the majors today as there are no great set ups to note. GBPCHF looks interesting this morning.
Weekly – After breaking out of the channel formation to the downside, GBPCHF moved relatively quickly to the 50% pullback level of 1.3416 (from 1.1264-1.5569). I still regard lows from Q1 2015 with some scepticism as different brokers seem to have different levels (after the Swiss National Bank pulled the support). However, it is the strong bullish price cation from the 1.3412 that lends to the medium term bias staying positive.
Daily – However, looking to the daily chart we are inside the Ichimoku Cloud (expect trading to be mixed and volatile) and the rally was capped on Tuesday and Wednesday at the trend of lower highs from February and March peaks. We now look for the cross to move lower towards strong support at 1.3811-1.3713 before buyers return (this is the base of the Ichimoku Cloud, previous support and between the 50%and 61.8% pullback level of the last rally).
One Hour chart – We have the opposite forming (bearish Head and Shoulders) with the last move lower impulsive and in five waves. Now we are unsure whether the right shoulder is properly formed yet and there is scope for a move towards 1.4165 (previous resistance) in an AB=CD formation. This is our prime sell entry. However, with levels already being rejected at the 50% pullback level (1.4132), and I am starting to build a short.
Another mild concern is solid support at 1.4000. We may look to lock in some profit here as a bounce is likely to retest the breakout level (1.4050). On a break of 1.4050 the measured move target would be 1.3890 (short term)
цитирайWe are going to move away from the majors today as there are no great set ups to note. GBPCHF looks interesting this morning.
Weekly – After breaking out of the channel formation to the downside, GBPCHF moved relatively quickly to the 50% pullback level of 1.3416 (from 1.1264-1.5569). I still regard lows from Q1 2015 with some scepticism as different brokers seem to have different levels (after the Swiss National Bank pulled the support). However, it is the strong bullish price cation from the 1.3412 that lends to the medium term bias staying positive.
Daily – However, looking to the daily chart we are inside the Ichimoku Cloud (expect trading to be mixed and volatile) and the rally was capped on Tuesday and Wednesday at the trend of lower highs from February and March peaks. We now look for the cross to move lower towards strong support at 1.3811-1.3713 before buyers return (this is the base of the Ichimoku Cloud, previous support and between the 50%and 61.8% pullback level of the last rally).
One Hour chart – We have the opposite forming (bearish Head and Shoulders) with the last move lower impulsive and in five waves. Now we are unsure whether the right shoulder is properly formed yet and there is scope for a move towards 1.4165 (previous resistance) in an AB=CD formation. This is our prime sell entry. However, with levels already being rejected at the 50% pullback level (1.4132), and I am starting to build a short.
Another mild concern is solid support at 1.4000. We may look to lock in some profit here as a bounce is likely to retest the breakout level (1.4050). On a break of 1.4050 the measured move target would be 1.3890 (short term)
Management and risk description
A move to 1.4000 and either take small profit or lower stop to entry
Parameters
Entry: short 0.5 of a unit at 1.4087. Look to sell again at 1.4165 (prime).
Stop: daily close above 1.4200
Target: 1.3890 and 1.3811
Time horizon: short today 5-7 session for both targets
цитирайA move to 1.4000 and either take small profit or lower stop to entry
Parameters
Entry: short 0.5 of a unit at 1.4087. Look to sell again at 1.4165 (prime).
Stop: daily close above 1.4200
Target: 1.3890 and 1.3811
Time horizon: short today 5-7 session for both targets
