The GBPCHF Conundrum: Will the Support Hold or Break?
14 March 2023
The GBPCHF, which could be considered an exotic instrument on the market, is currently the subject of a key battle. The price is currently hovering around a crucial horizontal support level, which makes it a matter of whether it will bounce or break through this level.
This support area has been around 1.108 (orange) since November, with GBPCHF bouncing off this level each time. However, with each bounce, the bearish pressure has been increasing, and yesterday saw sellers attempting a breakout. But instead of a breakout, we saw a hammer candle on the daily chart, which could be a promising buy signal. However, this is not being followed by traders today, with the price still threatening the support.
In terms of trading strategy, a price closing above Monday's candle could signal a buy, while a price closing below the lows of the hammer would signal a short.