Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Best Time / Month to Buy a Used Car From a UK Dealer - 16th Dec 17
Relief Rally in Gold Mining Stocks - 16th Dec 17
Amid Bad Fundamentals, Gold Sector Rally May Have Begun - 16th Dec 17
Gold Bullish on US Fed Interest Rate Hike - 16th Dec 17
The LORAX Explains What Happened to Sheffield's Street Trees 2017 - 16th Dec 17
Bitcoin Trading Alert: Bitcoin Pauses – Will Appreciation Follow? - 16th Dec 17
SanDisk Ultra 128gb 100mbs Micro SD Card for Smartphone's Speed Test - 15th Dec 17
Inflation is Spiking Globally… Bond Bubble Bursts in 3… 2… - 15th Dec 17
Sheffield's 'Real' LORAX Defending the Trees From the Labour City Council Patrol Units - 15th Dec 17
Stock Market Decline Signals are Near - 15th Dec 17
Santa Is Putting Christmas On The Blockchain And Saving Billions - 14th Dec 17
The Unprotected, the Protected, the Vulnerably Protected Classes—Which Are You? - 14th Dec 17
Gold’s Upside Target - 14th Dec 17
Year-end US Interest Rate Hike Again Proves To Be Launchpad For Gold Price - 14th Dec 17
2 Charts That Might Define the Fed’s Jerome Powell Era - 13th Dec 17
UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - 13th Dec 17
Stock Market Elliott Wave Forecasts - Is the World coming to the end? - 13th Dec 17
A Method Traders Can Use to Confirm an Elliott Wave Count - 13th Dec 17
Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - 13th Dec 17
A Former Wall Street Veteran: Good Traders Are Born, Not Trained - 12th Dec 17
Buy Gold, Silver Time After Speculators Reduce Longs and Banks Reduce Shorts to Continue? - 12th Dec 17
Masters of Economic and Political Illusion – in Taxes, Debt, Government, and Markets - 12th Dec 17
Approved Used Land Rover Main Dealer Real Customer Buying Guide - Hunters, Chester - 12th Dec 17
Gold Price 100% Bullish Signal - 12th Dec 17
Epic Stock Market & Fixed Income Bubble Will Not End Well - 12th Dec 17
Bitcoin can be stolen. Although Can’t be hacked - 11th Dec 17
Have Stocks Reached A Permanently Rigged Plateau? - 11th Dec 17
Trying To Beat The System Is A Fatally Flawed Investment Strategy - 11th Dec 17
Is This The Beginning Of The Next Silver Rush? - 11th Dec 17
The Dow Gold Ratio - 11th Dec 17
Evidence of a Stock Market Top Mounting - 10th Dec 17
Bitcoin Doesn’t Exist – Forks and Mad Max - 10th Dec 17

Market Oracle FREE Newsletter

Traders Workshop

GBP/CHF: Short-term Weakness Should be Followed by Resumption of Bull Trend

Currencies / British Pound May 15, 2017 - 03:26 PM GMT

By: MarketsToday

Currencies

The larger pattern in the GBP/CHF remains bullish given the following:

  • Decisive breakout of Head and Shoulders Bottom and also breakout above the 200-day exponential moving average (ema) occurred four weeks ago. (Note: Pattern is not perfect with right shoulder noticeably lower than left. But valid nonetheless given reaction of price following breakout above neckline and 200-day ema.)

  • Subsequently, the GBP/CHF continues higher following breakout and last week breaks out above the long-term downtrend line and closes above it on a daily basis. Even though the pair has closed back below the trend line the move above the line indicates this pair probably wants to go higher.
  • 21-day ema crosses above 200-day ema two weeks ago
  • During minor retracements price was rejected around 21-day ema support several times over the past six weeks and it held. This makes the 21-day ema a moving average to watch for support again in the future.
  • The 200-day ema was tested once as support during recent pullback and it held. Support may be seen again around the 200-day ema during pull backs.

Given the above the odds favor an eventual continuation of the uptrend that began off the mid-March 1.2215 bottom. In the short-term this pair is overbought and starting to pull back. However, support of 21-day ema is close by at 1.2814. The probability that we’ll see signs of support around the 21-day ema is higher than normal given that the uptrend line represents the same price support area.  On the below chart the uptrend line is covering the 21-day ema.

Regardless, if price continues lower the 200-day ema should halt further declines. The 200-day ema is now at 1.2748.

Watch price behavior around the 21-day ema for signs of reversal on the intraday charts. If the 21-day fails to hold the decent then next watch for support around the 200-day ema.

Upside potential is there given that the target from the Head and Shoulders Pattern is around 1.3865. This is a long-term target and it could take some time to meet this objective if it is to be reached.

In the meantime, lower down, the next main target area is around a price zone from approximately 1.3416 to 1.3582. That resistance zone provides plenty of upside as it’s over 500 pips above last week’s close of 1.2895. (www.marketstoday.net)

Bruce Powers, CMT
Chief Technical Analyst
http://www.marketstoday.net/

© 2017 Copyright Bruce Powers- All Rights Reserved

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.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife