Looking at the 19 July 2011 trading session
First let’s begin with the GBP/CHF currency pair. It has been in a long term down trend. Although Monday’s action was bullish let’s not get ahead of ourselves as we can dissect it by looking at shorter time frames than the daily chart. On the one hour chart, you can see at the Asian opening a significant gap down and then the pair gradually rose to around the level that the day started at. Because of this we don’t think there is a massive trend change. It should also be stated that the high was at 1.31695 roughly which is below the 1.32 level which is below the barrier which has acted as significant resistance in the past. Because of this we like to sell this rally as we do expect this pair to continue its downward trend.
Moving onto the GPB vs the USD chart which is an interesting one as it is a chart of two currencies that both have a lot of baggage. The only one keeping either of them up, is the fact that the EURO is actually worse given the Greek and other related issues surrounding that currency. Monday had a bearish day but did bounce from the 1.60 level, but what we are looking for, for a true breakdown of this currency pair is a close below the 1.59 level which would be a signal for a short-sell. A break below the hammer level, will likely send this chart down horribly, perhaps as low as 1.50 before any support is found. As we are bearish on this chart, we like to sell rallies or look for a break below the 1.59 level as an indicate of further weakness in this pair.
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