Talking Points:
- Hidden Reaction Level on GBP/CHF Daily Chart
- Clear Price Support Immediately Below
- Viable Entry Signal on the Hourly Chart
Hidden reaction levels have been coming into play more often as of late, and following the hidden trend channel we observed yesterday in EURGBP, we have a hidden trend line coming into play today in GBPCHF. Now, less-experienced traders would be more likely to miss the intra-trend action on the below daily chart and instead view it as a very choppy upward move (which it is).
The reaction line is located within the channel, as shown, and several areas of interaction have been highlighted to justify it. Alert readers will be able to identify even more. With price now retracing to it, there may well be an opportunity to enter a long trade in the direction of the overall trend.
Guest Commentary: Hidden Resistance on GBP/CHF Daily Chart
The four-hour chart below displays an easily obtainable zone of support based on previous support and resistance levels. A reaction off of this zone could easily provide a move of at least 180 pips to the recent high, and much more if the trend should continue.
Guest Commentary: Key Support Zone for GBP/CHF
The exact risk zone is 1.4734-1.4786, which is merely 52 pips by comparison, providing an attractive risk profile that favors the trader by more than 3:1.
The below hourly chart shows that a trade would have already triggered on the pin bar, but price has not moved far since then, and traders can still try to gain an entry as close as possible to 1.4798.
Guest Commentary: Viable Entry Signal on GBP/CHF Hourly Chart
As always, two or three attempts should be made to get in on the move, depending on one’s trading plan. Viable trade triggers include pin bars, bullish engulfing patterns, and bullish reversal divergence.
Certain currencies have seen sharp price movement today, and this may create more volatility with this trade as well. Nonetheless, the double pin bars are an encouraging sign for this trade.
By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com