The GBP/CHF pair fell fairly significantly during the session on Friday for the third session in a row. Because of this, it appears of the market is continuing to break down a little bit from here, but ultimately the 1.50 level below should be rather supportive. Because of that, I feel that buying this pair is the only way you can go going forward, and a supportive candle somewhere in this region is a perfect buying opportunity in my opinion. After all, we have been consolidating between the 1.50 level on the bottom, and the 1.55 level on the top for some time. The selloff has been a bit brutal, and a certainly overdone to say the least.
Remember, this pair tends to move with risk appetite, going higher when things are good, and lower when things are bad. I believe that we will continue to see the overall consolidation though, because quite frankly, even though the economic situation is tenuous at best in certain parts of the world, not exactly falling off of a cliff either.
Major support, this is where you want to see buyers step in
This is an area that has major support, so we want to see the buyers step in. In this general vicinity, any sign of support is a good risk to reward ratio trade as far as I’m concerned, because I think you could count on some type of move to the 1.5250 level if we do get a bounce. The other hand, we could break down from here and that of course would be a major sign of weakness. Either way, I think you are best served waiting for the daily candle to make your decision. If we break down, it’s going to be an excellent selling opportunity, but if we bounce is going to be an excellent buying opportunity. We could also consolidate in this area in a fairly tight range before making a decision, and that is why I prefer to wait for the daily close. Nonetheless, if we are going to see buyers step in this would be an excellent place.
