This week the volatility will be driven by Pound Sterling and Swiss Franc. In this post, we’ll review what could be the next path of the GBPCHF cross.
The big picture
The GBPCHF cross is in a bearish process which comes from a downward sequence started on April 2000. Since 2011 the price shows a higher lows sequence that began in August.
On the weekly chart, we observe the formation of a potential triangle structure. Short-term, the last two moves (black arrows) has found resistance at the 50% of the “main wave”, which is 1.38439. The next step calls for a potential decline. But to get more clarity, we’ll examine the “internal wave.”
Looking at the internal wave
The internal wave showed in the daily chart, looks like a triangle which is still forming. The confluence zone between 1.27 and 1.28 suggests that this area should act as the short-term resistance area. From here we expect a new drop to the blue box, it is from 1.2455 to 1.2208.
The RSI oscillator still keeps the bearish bias. We should see a bullish divergence as exhaustion movement before to think in the long side.
Remember that the price is not forced to move as our outlook suggests. The chart released corresponds to an Elliott Wave Analysis application.