Looking to play the GBPCHF channel with price action confirmation

November 4, 2013 in Forex Analysis

Today we are looking at the GBPCHF where an interesting price action setup has formed at the close of last weeks trading.

gbpchf price action signal at channel top

This market has clear downward channeling conditions on the daily chart so we are essentially looking to sell rejections of the channel top.

On Friday, a bearish rejection candle formed with a nice bearish close to the body of the candle, communicating the market denied moves into higher prices here. This level lines up with the top of the channel containment line, which has recently produced bearish price action signals that matured into nice profit.

Trading on Mondays can be harder with the interruption of the weekend pause in the markets, so ideally we would be looking for price to break the low of the bearish rejection candle before considering short positions. That way we have extra confirmation that the market is responding to the price action signal and playing out as anticipated.



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