Hello traders! Today GBP/CHF continues to move lower. And most probably you are asking when this collapse ends. I will try to give you some estimation on the potential bottom or at least the support levels to watch in the coming days.
First, let’s have a look at the 15m chart. We can see that today GBP/CHF broke below the uptrend trendline after rejecting the 200 Exponential Moving Average. It certainly looks that the downtrend remains valid, and sellers are dominating heavily.
Price is likely to continue falling and we have two support levels to monitor. First is 127.2% and the second is 227.2% Fibonacci retracement level applied to the recent corrective wave up.
The second Fibs is key support and let’s see why.
Above is a 4H chart, where GBP/CHF is trading within the descending channel. After breaking the 200 EMA on the February 20, the price corrected up and found the resistance at the 200 EMA. We applied Fibonacci retracement to that level and see that our targets on the 15m chart, correspond to 561.8% and 661.8% Fibs applied on the 4h chart.
But let’s dig even further. We can see that on the Daily chart, the very same support near 1.2100 area is also confirmed by 23.6% Fibonacci retracement level.
All these facts suggest an extreme level of demand at 1.2090 – 1.2100 area. And this could be the profit-taking zone for those who still hold their short positions on GBP/CHF.
It is important to keep in mind, that if price breaks above the 1.2292 level, bearish outlook will be invalidated and trend reversal could be initiated.
Bias: Extremely bearish while below 1.2292
Potential Support Zone: 1.2090-1.2100
Potential Targets: 1.2180, 1.2090
Have a profitable trading!