Tuesday, June 30, 2020

Bullish Divergence On GBPCHF

Marco Tosoni

FХ Strategist & Financial Commentator

After the sharp drop set in the beginning of 2020, when the prices scored a new bottom nearby 1.1100 area, in the second half of March the pound has regained relative strength with a bullish rally that pushed the quotes towards 1.2200 area. During the month of June, by the way, a new bearish rally began bringing this pair around 1.1700 area nearby the bottom zone set on last May.

While on yesterday’s session, after setting a new bottom around 1.1620 area, we had a first bounce with a closure nearby 1.1700 area and the formation of a doji candle.

The average true range is currently still falling and during the next trading sessions this pair should be rather stable and start working within a trading range.

Looking at the RSI indicator, we can detect a perfect bullish divergence, that should favour a short-term bounce, especially in case of a comeback towards last May support zone.

The setup would be activated in case of a breakout of yesterday’s tos around 1.1750 area. The stop loss could be placed at 1.1600 below yesteday’s bottoms, while the target price can be expected at 1.1900 around last week’s tops area.

As always I recommend to trade carefully and to plan at best every move. Don’t forget to subscribe to NBHM YouTube Channel to stay up to date with the financial markets! Have a good trading and see you for the next video.

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