It’s all about the pound on today’s canvas, as we play around with forex trading opportunities on GBP/CHF and GBP/JPY. Check it out and see if you can sneak in some pips!
GBP/CHF is consolidating around the 1.2225 area, which is around the 38.2% – 50% Fib retracement levels on the 4-hour chart.
But wait, are you also seeing a potential bullish divergence after the pair has touched the 200 SMA?
A break above this week’s highs could lead to a retest of GBP/CHF’s previous highs near 1.2450.
If you think that the pound will head lower and trade a downtrend on the lower time frames, though, then you could also wait for a break below the trend line and aim for the 1.2060 and 1.1900 previous areas of interest.
Did you catch pips from the Fib retracement setup that we discussed a few days back?
If not, that’s fine. Jumping in at current levels could still give you a decent reward-to-risk ratio especially if you aim for the previous lows near 127.00.
Watch out for the big 130.00 psychological handle, though!
As you can see, the area had been a battle ground for bulls and bears before. And, with stochastic flirting with oversold levels, buyers could use the 130.00 level to load up on the pound.
Good luck and good trading, forex warriors!