Pound bulls are partying like it’s going out of style (because, you know, self-distancing) after GBP/CHF found support at the 1.1200 major psychological handle.
Thing is, the current upswing is still within the pair’s descending channel on the daily time frame. In fact, it looks like GBP/CHF is about to run into a couple of resistance levels.
As you can see, the 38.2% Fib retracement lines up with the previous downswing low; the 50% Fib is around the 1.2000 area, and the 61.8% Fib is near the channel resistance levels.
Pound bulls can buy at current levels and bail at the earliest signs of resistance along these levels.
If you’re more of a trend trader, however, then you can also wait until you see bearish pressure after the current upswing runs out steam.
Good luck and good trading this one!
Remember that long-term range resistance that we checked out a couple of days back? Well, it looks like the bears managed to defend the level!
EUR/GBP is now about 150 pips away from the .9250 range resistance, which still presents a good reward-to-risk ratio if you’re betting on the bears keeping up their pressure all the way to the .8400 range support.
Not a fan of the pound? That’s alright, you can also wait a couple more candlesticks to see if a rejection at .8250 REALLY translates to more selling for EUR/GBP.
If EUR/GBP goes back up to retest .9250, then you can start drafting your trading plans for a possible upside breakout for the pair.