Simple Moving Average(SMA) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
- The GBP/CHF might finally have topped off after a sharp rally from 1.44 to 1.54 (a 1000-pip swing).
- There is a cluster of 61.8% fibonacci retracement level, psychological resistance at 1.54, as well as a previous support for a double top that was broken (after which, the slide from 1.60 extended to 1.44.
- This volatile pair also has the RSI now failing to sustain a break above 60 - all these are signs of topping.
- The 4H chart also shows the topping action in more detail, and lays out some fibonacci retracement levels as targets for conservative bearish scenarios.
- A diamond pattern is simply expansion followed by congestion. The left side of the diamond represents higher highs and lower lows, while the right side sees lower highs, and higher lows.
- This dynamic can reflect the sentiment at a top.
- The diamond is rare and can be seen as a reversal pattern when broken.
- The thing about patterns is that, they are always a product of our own perspective.
- Other trendlines show basically that the market is in channel and a break below the channel starts to establish the top. So far, all we have is a lower high to suggest a top.
- The RSI should also break below 40 in the bearish scenario.
- The decline could test support as early as 1.51, but extension towards 38.2% allows the market also to test a 200SMA in the 4H chart. This 1.5045 area is also a previous resistance seen Jan.5-7.
- A break below 1.5045 suggests the market can slide towards 1.48 (61.8% retracement) area.
- Anticipate a pullback from 1.5045 area. A pullback rally should stay below 1.53, and preferably below 1.52, for a bearish attempt to break below 1.5045, targeting 1.48.
How far will the GBP/CHF fall if the market indeed tops off? We would love to hear what you think.
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Fan Yang CMT
Chief Technical Strategist