Hello traders! GBP/CHF looks very pretty, especially in Ellion Wave theory terms. What we can see is the initial uptrend which was completed by the 5th wave, where price has reached the 1.3311 high on December 13.
Then the correctional phase has begun, and currently, it looks like GBP/CHF is completing the “C” wave. Based on the Elliot Wave theory, this is the last wave of a correctional move. We have used a Fibonacci retracement applied to the first corrective wave down on the initial uptrend. What can be seen is a clean bounce off the 23.6% support level at 1.2183.
If we take a closer look, by observing a 3H chart, we will spot strong support at 1.2200. Not only this is strong psychological support, but it is also confirmed by two Fibonacci retracement levels. First is 261.2% retracement of the ascending Fibonacci channel. Second is 227.2% Fibonacci applied to the last wave up occurred between 3-17 February.
What is unique about this, is both of these levels showed the support at 1.2193. And what is important, is that GBP/CHF bounced off this level cleanly. Yes, there was a spike below, although no close below that level. While we can still see price ranging and even producing yet another spike, we must see the weekly close above 1.2293. This could be the confirmation of a trend reversal after a potential triple bottom formation.
Bias: Bullish to Sideways while above 1.2190
Potential Support Zone: 1.2190 – 1.2200
Potential Targets: 1.2540
Have a profitable trading!