Using USDCHF to Predict GBPUSD’s Next Swing High

·    January 22, 2025

·      January 22, 2025

·    January 22, 2025


Is the US dollar rally done, or is there more to come?

Find out where GBPUSD might turn next and how USDCHF can offer new insights into the pound’s price action in today’s video.

GBPUSD is climbing this week after the US dollar’s four-month rally hit pause—for now.

Interestingly, the pound has only posted three green weeks in the last seventeen, not counting this one.

While I’m not entirely convinced the US dollar rally is over, it’s clear the greenback needs a breather, which has allowed pairs like GBPUSD to bounce.

The horizontal levels on GBPUSD are relatively easy to spot, but predicting where it might top out in the weeks ahead is less straightforward.

That’s where USDCHF comes in.

It might seem unconventional to look at a different pair for guidance, but USDCHF has a textbook ascending channel and shares a near-perfect inverse correlation with GBPUSD.

If GBPUSD isn’t offering a clear view of where the next swing high could form, using a correlated chart like USDCHF makes sense.

Currently, USDCHF is 75-100 pips above a confluence of support, while GBPUSD is below an imbalance stretching from 1.2380 to 1.2500.

I’d like to see GBPUSD “fill” this imbalance toward 1.2480 while USDCHF retests its confluence of support before considering a short on the pound.

The combination of these two scenarios could make for an appealing short opportunity.

For now, it looks like the US dollar may continue to unwind after an impressive four-month rally.

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Using USDCHF to Predict GBPUSD's Next Swing High 2

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