GBPCHF Trade Idea
GBPCHF dynamics are interesting. We saw EURCHF break parity overnight (a level not breached since the peg was removed by EURCHF back in 2015). This prompted the SNB to release some statements on the wires that the Franc continues to be highly valued and that they remain prepared to intervene in the FX market if necessary. This would clearly weaken CHF. Additionally, risk assets are found a bid after a Kremlin spokesperson stated that in order for military action to stop immediately the following conditions must be met 1) reject claims to enter any bloc with an amendment to their constitution 2) recognize Crimea as Russian and Donetsk and Luhansk as independent states. Algos would have scanned this headline and reacted positively. Below is the daily and 4-hour charts of GBPCHF.
The shaded circles indicate a potential double bottom on the daily chart around the horizontal support at 1.21. The RSI is moving out of oversold territory too. On the 4-hour timeframe I've used a Fibonacci tool to indicate the next key resistance at the 21-day EMA and the 23.6% Fibonacci level as well as beyond there the 50-day SMA and 38.2% Fibonacci level at 1.23.
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