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.
Gbpchf is currently trading against the down trendline on the weekly chart. The pair has been grinding up since its bullish reversal at the beginning of January. Yesterday we saw a break below the 4-hour trendline for a test of 1.5190s, but the pair bounced off quite vigorously and is now stalling at the highs. On many occasions, a pair will exhibit this kind of behaviour before forming double tops preceding a down move. Taking into consideration the weekly resistance, as well as its inability to breach 1.5420 daily resistance, I think a short setup is imminent. I will be watching for a double-top formation to take place, and also using price action as a cue to enter short. My ultimate target for this short, should the trade set up, will be the previously broken lows on the weekly chart at 1.5100s, and the stop loss will depend on my entry point. However, above the 4hr highs would be the safest for stop placement.
Just a note….Price action is critical on this pair. That is true for all pairs, but due to the fact that it often requires a bigger than average stop, it is important to get the entry as precise as possible. Remember… It could always push that much further.
Thanks a lot…Happy trading!! 🙂
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