GBPCHF: A Golden Opportunity

Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.

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Gbpchf is today bouncing vigorously after having made an all-time low at 1.4979. The pair was pushed to that level after having rejected the down-sloping trendline, as well as a shelf of previous support at 1.5860s on the weekly time. Although the fact that a new low has been made is significant, the overall picture reflects a support at that level, at which we have the low of a bullish pin bar made in December, 2008, and also the more recent tweezer bottoms formed by repeated retests of that support zone back in October of this year. Therefore, it is my opinion that, unless there is a significant weekly close below the mentioned support, we cannot call it breached. In reference to the daily chart below, I am expecting a retest of the broken trendline at 1.5450s, at the very least. A close above that area could see the pair heading back to the weekly resistance at 1.6000. At that point, I would need to see a break above the weekly trendline to consider further targets at 1.6750, and 1.7050.

Thanks for your continued support in reading these articles. I do appreciate it, and would love to hear your feedback and difefring points of view also πŸ™‚

You can also view my last analysis of Audusd here: http://winnersedgetrading.com/audusd-technical-outlook-economic-news/

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  • Hi Brettski. You are right…We are in uncharted territory. On Friday we saw the start of a possible reversal, so we now need to see some follow-through action. I think it’ll be more of a question of how big a bounce there will be. Technically, there should be one, and fundamentally speaking, the Swiss are really opposed to such significant strength in their currency. Thanks for reading and commenting. All the best for 2011! πŸ™‚

  • Brettski

    Hi Sophia, As we have now seen the GBPCHF take a significant fall down to a low of well below 1.47000, do you see the pair taking bounce back ? as we are in uncharted territory now, guess it’s hard to know with the strength in the Swiss

  • Thanks for sharing, Ryknow. Good job on your trades. I agree the CHF is particularly strong at the moment, but the market does still moves in waves. We’ll see what happens. I have to accept anything the market decides πŸ™‚ All the best!

  • Ryknow

    I’ll take the other side of the bullish GBPCHF trade. Hell, I am actually already short GBPCHF and well ITM. Fundamentally, I think the GBP is broken and until I see a significant changes (i.e. data points) in economic indicators along with some stability, I’m staying bearish the UK.

    I am long the CHF against anything for the most part. CHF = Stability. Also like NOK and SEK.

  • You’re welcome, Geoff. Thanks for reading and commenting as well πŸ™‚

  • Geoff

    Thanks for your comments, I am relatively new to FX and and feel I am learning a lot from your analysis.
    Thanks