GBPCHF Intraday Strategy
GBPCHF painted top Head-And-Shoulders (H&S) on the 4hr chart. The price broke below the neckline (1.4050), which may affirm the downtrend for the currency pair. After analyzing GBP on multiple time frames (not limited to GBPCHF) we suspect GBP weakness may be temporary.
GBPCHF 4hr Chart
Please click on the chart to enlarge:
GBPCHF may provide both a long and a short entry depending on which price levels will be initially tested by the market. The initial support is at 1.3970. The price would require to successfully test 1.3970, which if holds suggests an intraday reversal is due, targeting 1.4050.
In a scenario where 1,3970 fails to hold, which means the price reaches 1.3970 and closes below (which is not a re-test if the price posts a 4hr close below) the next level to be eyed for a successful re-test is 1.3895. A successful re-test of 1.3895 may suggest corrective gains are due, targeting 1.4050.
The 21 Moving Average (MA) will act as the nearest resistance. A re-test of the 21MA may suggest corrective weakness is due, targeting 1,4010.
Please note if GBPCHF re-tests 1.3970 or 1.3895 and corrects higher, a secondary re-test may not provide a valid entry, Only the first re-test will be valid at this stage, same applies for the 21MA potential re-test. Should the price re-test 1.3970, correct higher and later re-test 1.3895 then a second entry would be provided upon a successful re-test of 1.3895 as it will be considered as the first re-test.
We will issue an update should that change in accordance to the price action of GBPCHF.
The intraday structure of GBPCHF may provide multiple trades in the Forex market. Although the following is irrelevant to the strategy, the UK referendum on exiting the EU that is due on 23 June, 2016, is the probably one of the biggest events of the year. The latest polls give the NO camp (those that wish to remain part of the EU) slim majority, which suggests a lot of turbulence will be seen in the market as near mid June.