GBP/CHF is forming a potential bearish reversal pattern ahead of this week’s U.K. PMI releases!
Will the pair head for its June lows? Or will it find support from a previous area of interest?
We’re checkin’ out the 4-hour chart today!
GBP/CHF: 4-hour
GBP/CHF 4-hour Forex Chart by TradingView
In case you missed it, the Swiss franc was one of the biggest gainers last week following a round of risk aversion and U.S. dollar weakness in the markets.
On the other hand, Sterling lost pips to some of its counterparts after the U.K. printed weak employment AND retail sales activity for June.
Remember that directional biases and volatility conditions in market prices are typically driven by fundamentals. If you haven’t yet done your fundie homework on the British pound and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!GBP/CHF, which turned lower from its June highs, is currently trading just above the 1.1500 psychological handle and is right around where the pair consolidated earlier this month.
Is GBP/CHF in for more losses? Or are we looking at a pullback from the pair’s uptrend since mid-June?
GBP/CHF is sporting what looks like a Head and Shoulders pattern on the 4-hour time frame with the pattern’s “neckline” lining up with the 1.1450 inflection point.
Consistent trading below the “neckline” may draw in enough selling pressure to drag GBP/CHF below the 1.1400 mark and maybe gain enough momentum to revisit its 1.1250 June lows.
But if GBP/CHF sees bullish candlesticks and then momentum from its current consolidation, then the pair may head for its 1.1625 July highs if not new multi-month highs.
Watch this consolidation closely, forex friends!