On the one-month timeframe, GBPCHF displays a strong bearish trend, creating new lows. The long-term outlook on the monthly timeframe is largely bearish, though the pair was in a bullish mitigation or correction.
Dropping down to the weekly timeframe, we see a break in structure that created the new low at 1.0 price handle. Thereafter, there was a strong bullish correction targeting supply at the 1.16 price handle.
Since then, we have seen this pair create lower lows, indicating a bearish correction targeting the unmitigated demand (yellow order block).
Presently, we are monitoring the pair as we anticipate it to push lower and break the key structure (KSD).
Thereafter, we will have two options:
- A minor bullish correction targeting the unmitigated supply at the 1.14 region where it will pick orders and slide further targeting the unmitigated region (orange arrow).
- The break in daily volume will result in a further bearish slide targeting unmitigated demand. This option, represented by the red arrow, may not give sellers an opportunity to enter the market. However, buyers can look to enter once demand is mitigated.
How do we intend to trade this pair? We have a bearish bias in the interim, therefore, we are anticipating Option 1 to play out and pick our sell limit orders sitting at 1.1435 (liquidity) targeting 1.073.
NB: Our analysis is strictly based on supply and demand, suitable for swing traders.
Risk Warning: CFDs carry a high level of risk to your capital, and you should only trade with money you can afford to lose. Trading may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.
Disclaimer: I am not a financial advisor, and I am not telling you where or when to take a trade. I express my personal opinion only. Trading in financial markets involves risk. I am not responsible for any losses incurred due to your trading. I do not recommend any specific trade or action, and any trades you decide to take are your own.