Is the pair ready to go back down? As y’all can see, a pretty obvious descending channel has formed on GBP/CHF’s 1-hour forex chart. Presently price is at the channel’s resistance area, which also happens to be around the 1.4300 major psychological level. That right there gives us two technical reasons for price to go back down. The third technical reason is that the moving averages are currently indicating a downtrend, with the 100 SMA acting as dynamic resistance. The only worrying thing is that stochastic is making its way down and will soon be in oversold territory, which may attract enough buyers for an upside channel breakout.
GBP/USD has been grinding ever lower while trapped inside a very neat descending channel since the end of December, which is a pretty long time. Anyhow, price is currently testing the forex chart pattern’s support area around the 1.4100 major psychological level while stochastic is indicating oversold conditions, so y’all better start looking for buying opportunities. However, the moving averages are clearly in downtrend mode, which makes this a risky countertrend setup, so more conservative forex traders should sit this one out and wait for a pullback and test of the descending channel’s resistance area.
After a failed downside channel breakout attempt, price was pushed back. However, selling interest was so strong that the bullish price action was halted at the mid-channel area and price was forced back down. Still, the price area around the 164.70 handle seems to have a lot of buying interest since the bearish momentum fizzled shortly after. Also, stochastic is already indicating oversold conditions, so forex traders who are bullish on the pair may try to push the pair back up again soon. In any case, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals