Based on the Elliot Wave theory, GBP/CHF could have initiated a 4th corrective wave down, which eventually should result in an uptrend continuation. Although currently, wave B, of the ABC corrective move down could have ended. This is because of the clean rejection of the 78.6% Fibonacci retracement level at 1.2121.
Therefore, as long as this resistance holds, especially 4h and the daily closing price stays below, wave C could be taking place. In this scenario, price should be expected to decline towards the previously established supply/demand area, near 1.1900 psychological support. At the same time, this support is confirmed by two Fibonacci retracement levels, 78.6% and 61.8% as can be seen on the chart.
Moreover, the support corresponds to the 200 Simple Moving Average and goes inline with the simple uptrend trendline. This might suggest that the downside target near 1.1900 could be tested in just 6 trading days.
In regards to the upside potential, clearly, the long term trend is bullish and it can continue at any time. Therefore, watching 1.2121 key resistance is very important. Daily and/or 4h close above this level will invalidate the expected corrective move down, and at that stage, GBP/CHF is highly likely to continue trending up.
Key support levels: 1.1917, 1.1900
Key resistance levels: 1.2121, 1.2200
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice
Therefore, as long as this resistance holds, especially 4h and the daily closing price stays below, wave C could be taking place. In this scenario, price should be expected to decline towards the previously established supply/demand area, near 1.1900 psychological support. At the same time, this support is confirmed by two Fibonacci retracement levels, 78.6% and 61.8% as can be seen on the chart.
Moreover, the support corresponds to the 200 Simple Moving Average and goes inline with the simple uptrend trendline. This might suggest that the downside target near 1.1900 could be tested in just 6 trading days.
In regards to the upside potential, clearly, the long term trend is bullish and it can continue at any time. Therefore, watching 1.2121 key resistance is very important. Daily and/or 4h close above this level will invalidate the expected corrective move down, and at that stage, GBP/CHF is highly likely to continue trending up.
Key support levels: 1.1917, 1.1900
Key resistance levels: 1.2121, 1.2200
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice