Trade view /
12 March 2018 at 6:30 GMT
Looking to GBPCHF this week and buying dips. Although the long-term outlook remains to the downside, the strength of the initial move higher highlights a dip buying opportunity this week.
Monthly: With a five-wave pattern now complete (Elliott Wave formation) the bias is for a corrective move higher. The monthly Ichimoku Cloud has capped the initial rally.
GBPCHF long-term chart
Weekly: Mixed trading for the last 74 weeks has formed a bearish Ending Wedge pattern. Although this pattern has an eventual bias to break lower, last weeks bullish Engulfing formation offers an immediate upside bias.
The Marabuzo level (mid-point form open and close) is located at 1.3039. A pivotal level is 1.3414
GBPCHF weekly chart
Daily: Five consecutive positive daily performances in succession. We have stalled at the 50% pullback level of 1.3177 (from 1.3491-1.2862).
There is ample scope for a correction lower before the next correction rally higher resumes. With the 78.6% pullback level being close to the aforementioned 1.3414, this is our prime target zone this week (1.3342-1.3414).
GBPCHF daily chart
Intraday (four-hours) – Numerous reasons to buy dips:
GBPCHF four-hour chart
- Stalled at the trend of higher highs
- The initial move higher is impulsive; therefore, the correction lower should be corrective.
- Fifty percent pullback level at 1.3027
- Bespoke support at 1.3027
- The move lower could form a bullish reverse Head and Shoulders pattern
Intraday (six-hours) – If the cross stalls and reverses higher from our buy trigger then an AB=CD formation is seen at 1.3360 (inside our target zone).
GBPCHF intraday chart
Source:All charts, Saxo Bank
Management and risk description
Entry: Buying at 1.3027
Target: 1.3340 and 1.3480
Time horizon: Medium term
— Edited by Adam Courtenay
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