GBP/CHF finally invalidated a descending channel that has been respected since the start of September by breaking to the upside. Not to worry, though, since an ascending channel formed almost immediately after. Presently, the pair is testing the new channel’s support area. And there’s a better-than-average chance that support will hold because stochastic is already signalling oversold conditions. In addition, the channel’s support area lines up with the 1.2600 major psychological level.
As y’all can see above, EUR/GBP recently broke to the downside from that there ascending channel. However, there was very little follow-through selling since the 200 SMA appears to be acting as dynamic support. But at the same time, it looks like the bears have entrenched themselves at the 0.8630 handle, a price area with significant market interest. The pair is therefore trapped between a rock and a hard place, which is why it has been trading sideways in a tight range recently. Bulls may want to keep an eye on the 0.8630 handle, since a break higher there might mean that the pair will go back inside the ascending channel. A downside move seems more likely at the moment, though, since stochastic is already pushing away from overbought territory.
Recently, GBP/USD has been steadily trading higher while trapped inside a small ascending channel. And in the process of trading higher, the pair inadvertently broke past that well-respected falling trend line (dashed line). The upside momentum seems weak at the moment, so there’s still a chance that the pair will drop back below the trend line. However, stochastic has just left the oversold area and the pair has already reached the channel’s support level, so probability seems to favor an upside move for now.
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