Can you believe we’re already in the middle of the week? Today I’m servin’ up not one, but TWO franc-related trends you can chew on. Get ’em while they’re hot!
GBP/CHF just executed a 150-pip dive in the last couple of hours, which put the currency at the bottom of an ascending channel that hasn’t been broken since August 12.
What makes the bearish move even interesting is that GBP/CHF’s current price is just above the 200 SMA on the 4-hour chart.
Are we looking at a bargain price for the pound? Buying at current levels would give you a good reward-to-risk ratio especially if GBP/CHF pops back up above 1.2050 in the next trading sessions.
Be careful about catching falling knives, though! You might want to wait for a bullish momentum in case the bears aren’t done nibbling on the pound just yet.
Feel like shorting GBP/CHF instead? That’s fine, you can also wait for a clean break below the channel AND the 200 SMA and then execute your best breakout strategies.
Here’s one for the franc bulls out there! USD/CHF is flirting with the .9820 area, which is just below the .9850 psychological for the pair.
As you can see on the chart, .9850 also lines up with a descending channel resistance that hasn’t been broken since mid-May. What’s more, stochastic is hitting overbought territory!
Shorting at the earliest signs of bearish momentum would give you decent pips especially if the dollar drops back to its August lows.
If you think that the dollar’s bullish run will continue, however, then you could also place a couple of long orders above the descending channel that we’re watching.