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Moment of Truth for the GBP/CHF

Last updated 4/3/2009 7:41 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

The GBP/CHF is at a crucial point.  A bearish Gartley and double top have just completed as we highlighted in the following feature (  GBP/CHF Forming" href="http://www.fx360.com/commentary/brad/943/opportunity-to-short-gbpchf-forming.aspx"> Opportunity to Short GBP/CHF Forming  ).  If this pattern breaks to the upside, it is likely that the pair will rise to 1.7134, which is the 78.6% Fibonacci retracement on the 8hr Chart.  However, we feel this represents a solid opportunity to go short.  The trade has already seen resistance at the entry of our trade, but could test the level again over the weekend.

We are looking to sell the GBP/CHF at 1.6835 (Point D).  Point D is located at the convergence of the following points:

The trade has risen to completion with excellent time symmetry and has acted well so far.  Remember, we can still enter the trade if it rises back to the entry.  However, it is not prudent to enter the trade if the pair falls to T1 (1.6607) before entering.  Notice that the profit targets have been adjusted since this trade was initially featured.  If the pair makes new highs, the new targets should be ignored and the old targets on the link above should be used.

To recap, we will look to sell the GBP/CHF at 1.6835 with our stop placed at 1.6950.  Our initial profit targets are 1.6607 (38.2% of CD) and 1.6460 (61.8% of CD).

8hr Chart - Entry is near the 61.8% Fibonacci retracement.	4hr Chart - Bearish Gartley; sell @ 1.6835.

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