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GBP/CHF to resume uptrend?

Last updated 2/12/2009 7:22 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

The GBP/CHF has been trending up since the New Year.  However, the pair has retraced back down over the past week.  During this drop, we see a potential bullish Gartley pattern and double bottom forming.  We see a bullish channel forming on the 8hr Chart which suggests the bullish Gartley fits within the long term price action of the pair.

 We are looking to buy the GBP/CHF at point D (1.6453).  Point D is located at the convergence of the following points:

The primary cause for concern is that this pattern is relatively short term and could form long bars in the CD leg.  If bars of above average length are seen in the CD leg, we will likely cancel the trade.  It is also important that point C (1.6608) holds or the pattern could change slightly.  If the pair rises above 1.6620 before entering the trade, the trade is invalid.

To recap our trading plan, we will look to buy the GBP/CHF at 1.6453 with our stop placed at 1.6410.  Our initial profit targets are 1.6498 (38.2% of CD) and 1.6540 (61.8% of CD).  As usual, we will use a stop because a break through our stop could signal a large drop.

8hr Chart - Bullish Channel.	15min Chart - Bullish Gartley and double bottom; buy @ 1.6410.

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