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 fell to 1.4220 weekly support, thereby completing a daily head and shoulders pattern. The 1.4220 level is of significance, as it represents support from a weekly trading channel that forms when the major support points at 1.7594 and 1.5118 are connected (marked in with red line on wkly chart below). Although the weekly chart now bears a long wick, there was a partial close of last week’s bearish candle below this channel support. A move back up to that area will bring it back into contact with that line at 1.4760, at which point it should turn into resistance. Additionally, the 50 % fibonnacci retracement of the last A, B swing, pulled from the right shoulder high (1.5195), and the low at 1.4320, lies in the same region, at 1.4760.
Due to the convergence of resistance at 1.4760, I will be watching that area for a short setup. Further to the upside, more resistance lies at the 1.4900 level, where can we have the neckline of the head and shoulders pattern, as well as the .618% fibonnacci retracement level. As a means of confirmation of a short trading opportunity, I will be looking for a 15-min/1hr trendline break/reversal setup. The first major target will be the current weekly lows, if the setup plays out. Once there, I will look for follow-through to support trend continuation, and an extension of the head and shoulders pattern.
Thanks for reading, and please do share your own outlook on this pair 🙂
Forex Crunch: Eurusd March 21- Holding on to High Support
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