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Currencies CHF Top Trade Idea For June 16th, 2014– GBP/CHF


The week right after June’s NFP was rather quiet but volatility may have begun to brew as of market’s close last week since traders could be expecting market sentiments to impact the before-and-after of this week’s economic events.  What should we as traders be aware of in the upcoming days and weeks in order to keep the balance between not missing out on opportunities whilst keeping the risks level at bay?

GBP CHF 1hr 1806204

GBP CHF 16th June 2014

Firstly, let’s briefly sum up some fundamentals and geopolitical factors that would prove to be a catalyst influencing market movements as follows;

 In the US alone, a set of events revolving the FOMC is said to come in a set of threes, starting off with its’ decisions on Wednesday followed by its’ quarterly forecast then the much anticipated Janet Yellen’s press conference. On the other hand, how will news of latest actions by Iraqi forces as well as plans of deploying US warship in the gulf be digested and reflected onto the price of crude oil, precious metals, stocks and all other financial instruments when market opens tomorrow? To add to the mix of potential conundrums in the markets, the BOE minutes will be announced this Thursday with the UK’s inflation readings the day before which is expected to be unchanged at 1.8%.

Additionally, cable will face the tests of inflation data and retail sales this week so by taking into consideration various sterling pairs, I am particularly interested in the GBP/CHF that have showed a steady upside acceleration which could reinstate the Pound’s bullishness. Moreover, I am looking at potentials in the GBP/CHF to break higher and if it does then it would probably hint of other prospective opportunities in a negatively correlated pair like the EUR/GBP in order to participate ina  sell entry.

As seen in the EUR/GBP 1Hr chart above, an ‘M’ pattern has been spotted signalling a short term downtrend from C to the D level and expected to correct itself upwards at the Potential Reversal Zone (PRZ) zone marked in blue. For those trading based on the hourly chart, an ideal sell would be below the area marked in beige which would be under the 1.5190 level with take profit levels between the 1.5150 to 1.5113 area. The projected movement on the hourly chart could hint a correction for the charts of the longer time frames. On the Daily chart however, a biggish ‘W’ like pattern is seen to have emerged signaling probable bullishness of the pound progressing upwards form point C to the D area. Upon completion of the ‘W’ pattern at either one of the D zone, prices are expected to start plummeting and hence it’s called a bearish ‘W’ pattern.  At the time of writing this morning (GMT +2), GBP/CHF was trading at 1.5283 and an ideal buy entry could be seen at above the 1.5280 level at either 1.5290 or to be more conservative, one could begin entering at levels above the 1.5300 area. It is wise to be aware of the analysis being based on a Daily chart so do hold your excitements of potential hundreds of pips and I suggest to ride along the events that will prove to be a catalyst for the movement of the pound but do be cautious of your entries by taking your trades or profits in smaller stages as to practice proper money management.

Happy Pipping !

About Kenny Simon

kennysimonKenny Simon is Head of FX Training and the Asian Markets at Vinson Financials ( He is a contributor for the Educational and Technical Analysis section of several reputable websites. Being a fan of the wonders of nature, he  believes that trading in-harmony with the market’s natural ebb and flow could potentially increase one’s success in obtaining Low Risk, High Probability Trades. Besides the technical aspects of his analysis, Kenny emphasizes the importance of understanding and applying Fundamental Analysis, Money & Emotions Management into one’s approach to trading the markets.

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