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We’re going to kick off today’s commentary with a pair that has a lot of bullish momentum at its back going into a major level. In fact levels don’t get much more significant than this.
GBPCHF recently broke out of a wedge, which we actually traded in the member’s area for a healthy 8% profit (risking 2%). The target was former resistance at 1.5483, which is significant on many levels. But first let’s talk about what happened since that retest.
Upon retesting 1.5483, GBPCHF fell back to former wedge resistance which once again acted as support for the pair. Just six short trading days later, the pair finds itself 200 pips higher and knocking on the door of a breakout once more.
Now let’s talk about this key level. The 1.5483 handle has four things going for it, none of which are minor by any means.
The result of all this is a level that’s extremely obvious. As we all know, when it comes to trading Forex the most obvious levels and signals are what lead to profits.
So what’s the game plan?
Simply wait for a daily close above 1.5483. Of course you could use a 4 hour close, but with a level this significant I’m opting to use a daily close as confirmation. Once we get that close, we can simply look to go long on a retest as new support.
Levels to keep an eye on to the upside are 1.5688 and 1.5848. We may get one more pullback before a move higher, but I’m certainly keeping a close eye on the breakout potential of this market.
Summary: Wait for a daily close above 1.5483 and then watch for a retest as new support. Key resistance comes in at 1.5688 and 1.5848.