Best Financial Markets Analysis Article After nearing an interesting Fibo projection earlier this year the GBP/CHF cross rate recovery came to a halt. Subsequent weakness has been quite deep but we have just seen a potentially bullish Key Reversal Week, marking at least a temporary turning point.

The FX Trader’s view

WEEKLY CHART:

This year’s medium term bull signal came at the break through falling resistance.

This return line now offers support (runs through the 1.5700 area currently).

However, last week saw a bullish Key Reversal Week which favours at least a s/term recovery now.

DAILY CHART:

After failure just ahead of the Fibo projection support has come after erosion of the 61.8% pullback level. Note how the lower 76.4% coincides with the 1.5842 Mar low (this has a bearing on that Fibo projection).

The break of the 23.6% bounce level is encouraging and, with the Key Reversal Week in place, we view s/term dips to be temporary ahead of further strength.

The 1.6873 38.2% level becomes next target, but key resistance lies higher at 1.7346/1.7379, 61.8% and 13-Jul low.

Note that we can’t say if this is a major turnaround yet.

Buyers on dips will ideally favour a pullback towards the 61.8% retracement, so just around 1.6350/40 currently, with initial stops ideally just below 1.6100. A suggested target of 1.6850 for partial profits, then raising stops to cost. Further profit-taking would be wise ahead of that key 1.7346/79 resistance (no guarantees this can be reached, of course).

Note that a reverse situation presents itself in EUR/GBP. Our Update of 9th Oct, with a bearish ‘warning’, looks to have been appropriate if not spot on with its timing.

Mark Sturdy
Philip Allwright

Seven Days Ahead
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Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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