GBPCHF breaks key, long-term horizontal support

GBPCHF breaks key, long-term horizontal support
Important things are currently happening on the GBPCHF pair and today, or perhaps tomorrow, we should get an answer about the future direction of this instrument. We are talking about a signal which may be valid for a few weeks here, as the chart of our interest is a daily one.
Since October last year, the GBPCHF is trading sideways and moving inside a rectangle between the yellow support and the black resistance. Today, the price is attacking the yellow support around the 1.106 and the breakout can have a huge impact here.

So far, before the middle of the European session, sellers are going through the defenses quite easily. The pair is currently making new monthly lows. The price closing a day below the yellow area will be a proper signal to go short.

On the other hand, buyers can still have a chance to perform a counter-attack. Should this happen today, the price would create a hammer, i.e. a candle with a long tail. If it happens tomorrow, it will create a false breakout and a bullish engulfing, both cases being a strong signal to buy. As for now, we have to wait – options to sell seem tempting for now, but it would be great to receive additional confirmation first.
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