I’m seeing this neat break-and-retest opportunity on the daily chart of GBP/CHF, but the direction might hinge on the outcome of the EU Summit! Here’s what’s on my radar.
GBP/CHF Trade Idea
This pair crashed below the bottom of its long-term ascending channel visible on the daily time frame, indicating that a reversal from the uptrend is about to take place.
Price found support at the 1.2460 level, though, and bounced right back up for a retest of the broken channel bottom. This is close to the 50% Fibonacci retracement level and the 1.3150-1.3200 region, which I’ve got my one good eye on as a potential sell zone.
Stochastic is already reflecting overbought conditions and might be ready to turn south, so you can bet I’m considering hopping in at market. However, the ongoing EU Summit poses a huge event risk for pound pairs so I’m gonna sit on my hands for now.
Still, I can’t help but think that this might not turn out well for the U.K. as PM May hasn’t presented any fresh proposals just yet and EU leaders aren’t very pleased about this. There have been talks of extending the Brexit transition period to give both parties time to adjust, but there have also been indications that the extraordinary Brexit summit expected next month might not push through.
I’ll keep close tabs on remarks from EU officials while the summit goes on, waiting for more signs of frustration and discord to spur some bearish momentum for this pair. Pessimistic, I know, but I could really use a big win!
If I’m able to catch a short position, I’ll set my sights on the swing low as my profit target and place my stop past the 61.8% Fib and 1.3300 mark. What do you guys think?
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