Now let’s move to today’s technical analysis and look at an interesting pair. This is not a first-choice instrument for many traders, as it sits more on the minor side, but it currently offers a very clean and technically attractive setup. I’m referring to the British pound versus the Swiss franc.
On the daily chart, we can clearly identify an inverse head and shoulders formation, marked in green. The structure is well developed and capped by a horizontal resistance level acting as the neckline, marked in orange. Yesterday, price attempted a breakout above this neckline, but the move failed and the session closed with a shooting star formation, highlighted by the purple arrow. Shooting stars are bearish reversal candles, as they reflect a strong rejection of higher prices and typically favor downside continuation.
This candle appears in a broader bearish context. Despite the inverse head and shoulders structure, the long-term trend on this pair remains to the downside, with price clearly trading lower over a wider horizon. The shooting star at resistance reinforces this negative sentiment. That said, today we are seeing some demand coming back into the market, which suggests that jumping into short positions immediately may be premature.
From a technical perspective, the key level to watch on the downside is the red ascending trendline, which has been supporting the recent short- to mid-term uptrend in place since November. A clear daily break below this trendline would invalidate the short-term bullish structure and could act as a technical trigger for short positions.
On the other hand, the bullish alternative remains valid. If price manages to close a daily candle above the upper wick of yesterday’s shooting star, this would negate the bearish signal and confirm acceptance above resistance. In that scenario, a continuation to the upside would be favored, and the setup would shift back toward the inverse head and shoulders breakout narrative.