Along with multiple other CHF pairs, where Swiss Franc is expected to be outperformed, GBP/CHF short, medium, and even the long term uptrend might be about to start.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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Trade Idea Details:
GBP/CHF symbol on the MT4 platform
Key support levels: 1.1880, 1.1830
Key resistance levels: 1.2033, 1.2130
GBP/CHF clearly indicating the validity of the uptrend as the price continues to print higher highs and higher lows while trading above the 200 Simple Moving Average. Therefore, the uptrend continuation holds higher probability compared to the downtrend, and today GBP/CHF could be presenting an extremely interesting buying opportunity.
This is because the price has reached the bottom of the ascending channel as well as tested 200 Simple Moving Average and the previous area of resistance, which is now acting as the support. The most important fact is the very clear rejection of the 1.1878, which is the 38.2% Fibonacci retracement level applied to the overall upside move. Therefore, as long as the 4h closing price remains above the 1.1878, GBP/CHF is likely to continue rising, potentially towards the 1.2130.
The 1.2130 could be the nearest key resistance, confirmed by two Fibonacci retracement levels. The first is 23.6% Fibs applied to the 15.05.2020 – 05.06.2020 upswing. The second is 161.8% Fibs applied to the current corrective move down, where 1.1878 support was rejected. And finally, the upside target is crossing the average price uptrend trendline on August 19, which means that this could be a relatively fast 250pip move to the upside.
Potential Trade Idea:
Wait for the current 4h closing price to make sure that it remains above the 1.1878 support. If that will be the case, the buying opportunity is wide open. The stop loss must be placed below the point where previously GBP/CHF rejected the 200SMA, which was at 1.1830. The upside target, confirmed by two Fibs and the average-price uptrend trendline, is located 1.2130 and the take-profit can be placed just a few pips lower.