Technical analysis – GBPCHF consolidates, trapped between moving averages
Posted on October 2, 2019 at 3:39 pm GMT
Anthony Charalambous, XM Investment Research Desk
GBPCHF buyers have reversed the price off the 1.2200 support of the September 12 swing low, after denying sellers a further pullback past the 1.2169 level, which is the 38.2% Fibonacci retracement of the up leg from 1.1671 to 1.2476. Despite the completed bearish crosses of the simple moving averages (SMAs), the price action has risen finding resistance from the 23.6% Fibo of 1.2285 and the 100-period SMA.
The short-term indicators reflect easing negative momentum as the MACD is above its red trigger line in the negative zone and near the zero line, while the RSI points up after having crossed above the 50-level into the bullish territory. Despite the flattening of the 20-period SMA, and the side move adopted, the bearish signals seem to remain intact, thus traders need to be cautious of the negative picture.
To the upside, if the bulls climb above the 23.6% Fibo of 1.2285 and the 100-period SMA, the 1.2330 nearby resistance could then apply some pressure. Moving higher and surpassing the 1.2365 area could open the door for the eleven-week high of 1.2476 ahead of the 1.2500 psychological number.
In the negative picture, if the bears manage to retake control and steer the price back down, they could stall at the 20-period SMA before the 1.2200 support. If sellers overrun the holding support of 1.2169, which is the 38.2% Fibo, the pair could then focus on the swing low of 1.1850, provided the 50.0% Fibo of 1.2075 and 61.8% Fibo of 1.1980 are overcome.
Overall, the picture remains neutral in the short-term, and a break below 1.2169 or above 1.2330 would reveal the directional bias.