5 reasons to buy dips in GBPCHF this week

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Looking to GBPCHF this week and buying dips. Although the long-term outlook remains to the downside, the strength of the initial move higher highlights a dip buying opportunity this week.

 

Monthly: With a five-wave pattern now complete (Elliott Wave formation) the bias is for a corrective move higher. The monthly Ichimoku Cloud has capped the initial rally.

 

Weekly:  Mixed trading for the last 74 weeks has formed a bearish Ending Wedge pattern. Although this pattern has an eventual bias to break lower, last weeks bullish Engulfing formation offers an immediate upside bias. The Marabuzo level (mid-point form open and close) is located at 1.3039. A pivotal level is 1.3414

 

Daily: Five consecutive positive daily performances in succession. We have stalled at the 50% pullback level of 1.3177 (from 1.3491-1.2862). There is ample scope for a correction lower before the next correction rally higher resumes. With the 78.6% pullback level being close to the aforementioned 1.3414, this is our prime target zone this week (1.3342-1.3414)

 

Intraday (four-hours) – Numerous reasons to buy dips:

1. Stalled at the trend of higher highs
2. The initial move higher is impulsive; therefore, the correction lower should be corrective.
3. 50% pullback level at 1.3027
4. Bespoke support at 1.3027
5. The move lower could form a bullish reverse Head and Shoulders pattern.

 

Intraday (six-hours) – If the cross stalls and reverses higher from our buy trigger then an AB=CD formation is seen at 1.3360 (inside our target zone)

 

 

In regards to the PIA analysis, no representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.