Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Bearish Engulfing Pattern For GBP/CHF

ByRazvan Podariu
Published 07/08/2014, 03:16 AM
Updated 07/09/2023, 06:32 AM

Yesterday, the GBP/CHF made a bearish engulfing pattern on the daily chart which might signal a reversal in this currency pair. Fundamentally, there is no reason to see a weakening the GBP or a strong CHF as also from a technical point of view we are not exactly at a resistance level, as on the weekly chart, the first resistance that I see is in the 1.5450 - 1.5480 area. However, the bearish engulfing formed at the top of a bullish trend, and is very clear, leaving no doubts about it.

Maybe it has no meaning, but looking at the rate action and confronting it with the 200 SMA on the daily chart, we notice that in the past 17 months, every time this pair was getting too far from the 200 SMA (see the red squares on my chart) the rate action came back to retest the moving average line. Maybe it wants to do the same even this time. If so, the 200 SMA is at 1.4794, but I don't think it will fall so much.

The 4h chart shows me that the first important support comes in the 1.5115 - 1.5140 area, but before that we need the 1.52885 area to be broken and the price to close under that level to have a confirmation of the bearish engulfing pattern.

For now I am tempted to sell this pair with a stop loss above 1.5375.

Latest comments

Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.