Hello traders! In my previous GBP related analysis, I’ve emphasized the strength of the Great British Pound in relation to other major currencies. This tendency is likely to continue and today we’ll observe GBP/CHF price action.
Below is the daily chart, with the Fibonacci retracement indicator applied to the August – December 2019 uptrend. We can see that price has found the support at 88.6% Fibs (1.1862), went up, and then found another support at 76.4% Fibs (1.2062). It looks like Fibonacci applied to the past trend, still valid and we could use them as the potential upside targets. In total there are 3 of them, where nearest is at 61.8% Fibs which is 1.2300. This probably is the most important level as it might also correspond to the 200 Exponential Moving Average. Break above the first resistance should result in price moving towards either 50% Fibs at 1.2493 or 38.2% Fibs at 1.2686 being the final upside target.
If we zoom in and look at the 1-hour chart, we can clearly see the Elliot Wave pattern. Currently, we see that the second correctional phase has ended, where price found the support at 61.8% Fibs, which is 1.2082. Wave 2 of the current 12345 pattern was stopped right at the 50% Fibs which is 1.2105. It is very possible that from this point onwards price will start rising towards the nearest resistance at 1.2300 psychological level, which is 180 pips potential upside move. But as already mentioned, if this resistance is broken, the price should rise much higher.
Bias: Strongly bullish while above 1.2082
Potential Support Zone: 1.2080 – 1.2100
Potential Targets: 1.2300, 1.2493, 1.2686
Have a profitable trading!