Good day traders! The GBP/CHF currency pair has continued trading sideways since I last covered this trade idea on the 30th of October.
When I first analyzed GBP/CHF, I identified a price zone between 1.3000 – 1.3100 where I expected price to move towards before a potential drop could take place. Price structure currently suggests that a Descending Triangle formation has taken hold, which means that should price break below my orange horizontal trendline, that a decline could start sooner than later.
There is a possibility that price already made a top when it reached my upper blue median line on the 17th of October (blue arrow). Since that top came in price started moving sideways and at some stage soon, I would expect a breakout.
A break below the 1.2692 price level, with decent momentum, could drive price lower towards my lower blue median line or the 0.5% Fib retracement level at 1.2537. The next level of support is slightly below that at 1.2477, where a previous high was formed.
I will keep my upper entry zone between 1.3000 – 1.3100 while I wait for directional confirmation once this triangle finally completes.
Until next time, have a great weekend!