If you have been tracking my analysis then you might have noticed two things: 1. I’m net bullish on the Cable and 2. I don’t care how deep the correction is, the deeper the better for buyers.
So here is the deal with this pair. I cannot for sure say the set up in the 4HR chart is perfect, perfect to even guarantee a 75% chance of GBP bulls soaring to last year’s high. There is one thing though, the stochastics in the monthly chart with my 26, 3, 5 stochastics settings are hinting on a possible GBP appreciation. There is that signature buy signal turning from the oversold territory and by the way, this set up is similar across all GBP pairs-it might even look like a copy pasting thing.
Last month’s candlestick also ended up as a bullish pin bar with that long lower wick meaning buy pressure was high. It will be mind boggling to see why bears are driving prices now that we are on the third week of the month. We only got next week to see if last month’s trend will be replicated before 2018. Now here’s the good thing. Prices are down 50% from last month’s high if you paste a Fibonacci retracement tool from November high-lows. Fact is there’s a lot of support along the 38.2% retracement level.
Anyhow, in the 4HR chart, GBPCHF prices are oscillating within a descending channel. Yes, a descending channel whose upper limit might end up being clear say by tomorrow. Like the monthly chart, the stochastics are bullish and confirming those higher lows relative to the lower BB.
With this, I will set a limit order and trade as follows:
Buy stop: 1.3255
Stop Loss: 1.32
Take Profit: 1.345-December 8 highs.
If you have a different opinion, let me know.