So, today we check GBPCHF pair and from my view, it looks like there are more downsides than upsides from a technical point of view. While last week was bearish as the candlestick shows, what is of interest is the way that candlestick closed. As we can see, not only was there an over-extension to the upside but that inverted hammer is the seal of bears. However, that’s not all. There is a stochastic sell signal in the weekly chart. These combinations hint of strong sell pressure and as such, the only logical way to trade this pair is to wait for sell signals in lower time frames and sell GBP.
Even though we have a strong stochastic sell signal in the weekly chart, things are not panning out as expected in the 4HR chart. First, buy momentum is picking up as stochastic shows. Besides, we have these higher highs relative to the lower BB. Fact is, prices are consolidating. The best way to trade is to have patience and wait for a break out in either direction. If there is a bullish breakout, then wait for a sell signal but if prices move lower, then trade with the weekly trend.
Because of this, my GBPCHF trade plan shall be as follows:
Sell Stop: 1.36
Stop Loss: 1.37
Take Profit: 1.31
Let me know what you think. Have a good trading day!!