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Forex: Ideas You Can Trade. GBPCHF recent price action.

Posted by Steven Hatzakis on Jun 19, 2013 1:47:00 PM

GBPCHF: Ways to trade the recent price action.

Wednesday June 19, 2013 16:30 UTC

The chart shows a bearish trend in GBPCHF (point 1 on chart) continuing as it has broken below a medium-term bullish channel (point 2 on chart) and testing just below it on a lower shorter-term parallel bullish-support line (also point 2 on chart).  Although a convergence of longer term trend lines is approaching (point 4 on chart), the short term momentum has been bearish, and is trading near the lower side of a developing triangle.

Failure to hold any support at current levels could cause GBPCHF to test lower within the existing short term bearish channel (point 1 on chart). Although the medium-term trend is bullish, the short-term momentum is bearish overall -with potential continuation within existing channels.

If current support holds there could be significant resistance along a long term descending bearish resistance line (point 3 on chart) which could cause a trend reversal unless there is a breakthrough to the upside.

Below are examples of how to trade a bearish continuation if the trend continues or a bullish reversal if the trend reverses and bullish support lines can be regained. 

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @1.4490 with a Limit to take profit @ 1.4566 and a stop-loss to cut losses @ 1.4426 Risk/Reward Summary: Limit risk = +76 pips profit / (-64) Stop-loss risk = Gain to Loss ratio = 1.19

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.4326, with a Limit to take profit @ 1.4270 and a stop-loss to cut losses @ 1.4383 Risk/Reward Summary:   Limit risk = +56 pips profit / (-57) Stop-loss risk = Gain to Loss Ratio = 0.98

gbpchfdaily june 19 2013 note resized 600

 

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